When it comes to retail, it seems as though there are two kinds of shoppers: bargain hunters and big spenders. You can play the thrifty end of the spectrum with exchange traded funds (ETFs), but finding luxury exposure might be a challenge.
Kai Ryssdal for Marketplace reports that some shoppers are putting on the Ritz. High-end stores like Saks Fifth Avenue (NYSE: SKS) is one example, its fourth quarter sales surged nearly 9% while some discounters have seen sales declines. [Shoppping the Retail ETFs.]
A point of caution: the economic upturn has been selective. You only need to look at the high unemployment rate to figure that, and even Americans lucky enough to be employed are struggling under the weight of stagnant salaries or even pay cuts.
Guggenheim shuttered its luxury ETF last year, and it was the only way to get pure-play access to the spending habits of the uber-rich. What to do? [Alternatives to the Closing Luxury ETF.]
Your best bet may be consumer discretionary ETFs, which can help you capture the spending habits of all income levels. Some options:
- First Trust Consumer Discretionary AlphaDEX (NYSEArca: FXD) has some exposure to Wynn Resorts (NYSE: WYNN), Estee Lauder (NYSE: EL) and Coach (NYSE: COH)
- PowerShares Dynamic Consumer Discretionary (NYSEArca: PEZ) owns Coach, as well as a number of travel companies and airlines
- Vanguard Consumer Discretionary (NYSEArca: VCR) has exposure to Las Vegas Sands (NYSE: LVS), Macy’s (NYSE: M), Wynn Resorts and Tiffany (NYSE: TIF)
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. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. 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.