ETF Trends publisher Tom Lydon appeared on Fox Business’ “Mornings with Maria” on Wednesday to discuss the retail sector, the potential impact of tax reform on the markets and the outlook for General Electric.
Lydon discussed with host Maria Bartiromo where retail is headed as Target today reported a third quarter 2017 comparable sales increase of 0.9 percent and GAAP earnings per share (EPS) from continuing operations of $0.87, a decrease of 17.7 percent from third quarter 2016.
“It’s good news today (for Target), but they are going to continue to suffer being in Amazon’s shadow,” Lydon said. “Their online sales still is only 4.4% so that’s going to be an ongoing drag going forward.”
Lydon said the biggest retail ETF, SPDR S&P Retail ETF (NYSEArca: XRT), has declined this year as big box stores continue to suffer as online sales keep increasing.
However, investors can look to ETFs that invest in online shopping, such as the Amplify Online Retail ETF (NasdaqGM: IBUY), which debuted last year. IBUY, which is comprised of global companies that generate at least 70% of revenue from online or virtual sales, has been one of the best-performing retail ETFs since its inception.
“If you look at Amplify IBUY, that’s up almost 30%,” Lydon said. “You are going to continue to see these trends continue. As you look at the holiday season, and as I look at it, I’m already going online and looking for deals as opposed to having to trudge through stores that are somewhat packed and may not have what I’m looking for.”