Why Retail ETFs Are Holding Strong | ETF Trends

Reports of the death of the spending-crazy consumer aren’t exaggerated, but they don’t mean that you should count out retail exchange traded funds (ETFs).

Unemployment is barely budging and there’s still a lot of consumer fear that’s keeping them from spending. How is it, then, that sales have improved? Jonah Kery for Investors Business Daily reports that September same-store sales rose 2.7%. More than three-quarters of retailers posted results that beat analysts’ estimates. [ETFs Are Flat On Consumer Sentiment.]

The key word here is adaptability.

There’s a new kind of retailer out there, and you can find them in certain ETFs. Who are they? They’re retailers that have adapted to the current economic climate or have carved out a niche so solid that little can seemingly crack it (think Netflix, for one). [Retail ETFs for the Holidays.]

When looking under the hood of retail ETFs by using the ETF Resume, look for retailers that are more value-focused and offering what’s appealing to consumers right now.

  • SPDR S&P Retail (NYSEArca: XRT): Owns CarMax, Best Buy, Walgreen’s, JC Penney
  • Vanguard Consumer Discretionary ETF (NYSEArca: VCR): Owns Amazon, Comcast, Home Depot, Target
  • First Trust Consumer Discovery Alpha ETF (NYSEArca: FXD): Owns CarMax, Family Dollar, Amazon and Priceline

Tisha Guerrero contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.