The past track record of select retail industries makes the $1.1 billion XRT an interesting play at this time of year. S&P data indicate apparel retailers, though not impressive in December, have outperformed the S&P 500 67% of the time in November dating back to 1990 and 61% of the time in January. Automotive retailers outpace the S&P 500 in the November-January time frame going back to 1990 78%, 75% and 78% of the time, respectively.
General merchandise retailers are better than the broader market 58% of the time in November and January, according to S&P Capital IQ. Apparel, automotive and general merchandise names combine for over 47% of XRT’s weight. The ETF is up nearly 37% this year. [Retail ETFs: Coal in the Stockings?]
Consumer staples stocks are laggards in the November-January period with November being their best month of out-performance of the S&P 500 at just 46% since 1990.
This could be the year when staples shine in the fourth quarter and into the first because the Consumer Staples Select Sector SPDR (NYSEArca: XLP) is the best performer among the nine sector SPDR ETFs dating back to late September. XLP has also easily outpaced XLY over that time. [ETFs Show Dubious Cyclical Rotation]
Retail Sub-Industry Frequency of Beating S&P 500
