5 Retail ETFs for Back-to-School Season

As summer vacation draws to a close, it’s back to pencils, books and teachers’ dirty looks for many students, which bodes well for retail ETFs looking to capitalize on a busy back-to-school shopping season. In addition, the retail sector had a tailwind of positive economic data from the Commerce Department behind it as retail sales increased by 0.5% in July–more than anticipated–an early indication that the economy is full steam ahead in the third quarter.

“The economy appears to be very well-positioned to continue to grow,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors. “The persistently optimistic consumer sector is doing its part to keep the growth engine going, and retailers are benefiting.”

With the economy bustling in forward motion, retail shops are expecting a robust back-to-school shopping season. Multinational professional firm Deloitte is forecasting that this year’s back-to-school spending will increase by 2.2 percent to $27.6 billion, with the average spending per household rising to $510 from $501 last year, including $112 on school supplies–up from $104 the previous year.

With consumers ready to open their wallets, these retail ETFs could be poised to gain.

Related: Data Bodes Well for Retail ETFs

1. SPDR S&P Retail ETF (NYSEArca: XRT)

The SPDR® S&P® Retail ETF seeks to provide investment results that correspond generally to the total return performance of the S&P® Retail Select Industry® Index (the “Index”). XRT gives investors exposure to the retail segment of the S&P TMI, which is composed of industries within apparel retail, automotive retail, computer & electronic retail, department stores, drug retail, food retailers, general merchandise stores, hypermarkets & super centers, internet & direct marketing retail, and specialty stores. XRT allows investors to take strategic or tactical positions at targeted levels as opposed to traditional sector-based strategies.

2. Amplify Online Retail ETF (NadaqGM: IBUY)

With the online retail industry in full swing, IBUY seeks investment results that generally correspond to the price and yield of the EQM Online Retail Index. IBUY seeks to measure the performance of global equity securities of publicly traded companies with significant revenue stemming from the online retail business sector. The index methodology is designed to construct a portfolio with capital appreciation in mind. IBUY has been able to provide investors with a 24.34% return year-to-date.

3. VanEck Vectors Retail ETF (NYSEArca: RTH)

RTH seeks to replicate the price and yield performance of the MVIS® US Listed Retail 25 Index, which includes common stocks and depositary receipts of U.S. exchange-listed companies that derive at least 50% of their revenues from the retail sector. Its top holdings include retailers, such as Amazon and Home Depot.

4. Direxion Daily Retail Bull 3X ETF (NYSEArca: RETL)

For the risk-averse investor, RETL seeks daily investment results that equate to 300% of the daily performance of the S&P Retail Select Industry Index that is designed to measure the performance of the stocks comprising the S&P Total Market Index classified in the Global Industry Classification Standard (GICS) retail sub-industry. With 300% leverage, RETL has been able to churn out a 23.72% gain year-to-date.

5. Invesco Dynamic Retail ETF (NYSEArca: PMR)

PMR seeks to track the investment results (of the Dynamic Retail IntellidexSM Index, which is composed of common stocks of 30 U.S. retailers. These companies are engaged principally in operating general merchandise stores such as department stores, discount stores, warehouse clubs and superstores; specialty stores, including apparel, electronics, accessories and footwear stores; and home improvement and home furnishings stores.

For more information on the consumer sector, visit our consumer discretionary category.