Consumer ETF Strategies That Have Avoided the Retail Slump

The retail sector has been falling behind in the S&P 500 for the first half of the year and the trend doesn’t seem to be shifting anytime soon. Nevertheless, there are some alternative retail sector-related exchange traded fund strategies that have stood out.

Four of the five worst-performing S&P 500 stocks in the first half of the year were retailers, The Wall Street Journal reports.

Dragging on the retail segment, many consumers have been shunning more traditional brick-and-mortar retailers in favor of businesses that have more quickly adapted to e-commerce or online retail businesses. Declining foot traffic is putting pressure on companies like Nordstrom and Kohl’s.

Many say that “retail is dead” as the slump for companies that are more firmly in the bricks-and-mortar space doesn’t appear to be letting up anytime soon. Nevertheless, we have witnessed increased opportunity in online retail or e-commerce stocks and ETFs.

With the increased popularity of e-commerce and the decline of traditional brick-and-mortar shops, investors can capture this growing trend through an ETF. For example, the ProShares Decline of the Retail Store ETF (NYSEArca: EMTY) and ProShares Long Online/Short Stores ETF (NYSEArca: CLIX) both take a short position in brick-and-mortar retail stores to capitalize on weakness in traditional stores. Meanwhile, the ProShares Online Retail ETF (NYSEArca: ONLN) takes on a long position in online retailers.

The Amplify Online Retail ETF (NasdaqGM: IBUY) has been a popular thematic play that targets global companies that generate at least 70% of revenue from online or virtual sales. As the market environment shifts and changes, investors may also have the opportunity to capitalize on the growth potential of the e-commerce segment. Additionally, Amplify recently expanded its line with the Amplify International Online Retail ETF (NYSEArca: XBUY). XBUY is an index-based ETF that takes on foreign companies or those outside the U.S. that are expected to benefit from the increased adoption of e-commerce around the world.

For more information on the retail sector, visit our retail category.