In addition to Wal-Mart, RTH features exposure to CVS Caremark (NYSE: CVS), Walgreen (NYSE: WAG), Costco (NasdaqGS: COST) and Sysco (NYSE: SYY). Those five stocks combine for 31.7% of RTH’s weight, giving the ETF significant staples exposure under the umbrella of a cyclical ETF.
The rub with that staples exposure is that the sector is currently the most richly value in the S&P 500, which diminishes some of the value proposition offered by RTH’s discretionary exposure. However, this is the time of the year to consider an ETF like RTH in anticipation solid earnings reports to come in the months ahead.
Retail observers have been monitoring weather forecasts for the final weekend before Christmas as it is expected to be one of the busiest periods of the holiday shopping season. For instance, ShopperTrak analytics calculates that this Super Saturday will be the biggest sales day of the year for the first time in a decade.
The weekend before Christmas has historically been one of the busiest periods of the year for brick-and-mortar stores since it is typically too late for online shipping orders to meet the Christmas deadline by then. [Time is Right for Retail ETFs]
Market Vectors Retail ETF
