Retail ETFs: Teens Take the Driver's Seat | ETF Trends

Retailers have long recognized the power of the adolescent and teen shopper. The economic downturn took away some of that power, but trendy teenagers could once again be putting gas in the engines of retail exchange traded funds (ETFs).

Dave Kansas for The Wall Street Journal reports that amid the retail sales report was not only improved sales for luxury retailers like Nordstrom (NYSE: JWM) and Saks (NYSE: SKS) was expectation beating results for teen retailers. Hot Topic (NASDAQ: HOTT) and Zumiez (NASDAQ: ZUMZ) reported stronger sales, a signal that ETF investors may want to think about the mallrat set when choosing retail ETFs. [Retail ETFs: Luxury Makes A Comeback.]

  • PowerShares S&P SmallCap Consumer Discretionary (NYSEArca: XLYS) owns companies such as Iconix (NASDAQ: ICON), Steven Madden (NASDAQ: SHOO), Zumiez and Skechers (NYSE: SKX), among others.
  • SPDR S&P Retail (NYSEArca: XRT) has exposure to Urban Outfitters (NASDAQ: URBN), Aeropostale (NYSE: ARO), the Gap (NYSE: GPS) and Abercombie & Fitch (NYSE: ANF).

According to Retailer Customer Experience, some of the largest U.S. chains are in expansion mode. According to the report, some of the most active retailers currently include Apple (NASDAQ: AAPL) , Dollar Tree (NYSE: DLTR) and Wal-Mart (NYSE: WMT), among others. [Retail ETFs: Better But Not There Yet.]

The strongest surge in growth plans is in those markets where unemployment is lowest, which could result in nice things for retail ETFs if the customers come calling.

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.