XRT is an equal weight ETF and none of its 103 holdings account for more than 1.48% of the fund’s weight. That should limit the damage inflicted upon the ETF by a small number of stocks, but Sears, J.C. Penney and Best Buy combine for less than 2.7% of the ETF’s weight. [Black Friday ETFs]
A rebound in retail stocks and ETFs at this time of year is not a coincidence. Historically, the retail sector has outperformed the S&P 500 from Jan. 21 through April 12, according to Thackray’s 2014 Investors Guide. Important to note about seasonal trends is that they start (and end) four weeks after the initial start date, indicating XRT’s February rally fits the trend’s parameters.
From 1990 through 2013, the retail sector posted an average gain of 8.8% during its seasonally strong period compared to an average gain of 2.4% for the S&P 500 over the same period while outperforming the benchmark U.S. index on all but five occasions, according to Thackray’s 2014 Investors Guide.
XRT Sector Allocations
