Much to students’ chagrin, it’s back to school for many as fall rapidly approaches. For retail ETF investors, it’s a lesson in profitability as seen in the Invesco Dynamic Retail ETF (NYSEArca: PMR), which reached a new 52-week high of $42.67 today.
Based on Yahoo! Finance performance figures, PMR is up 5.73% year-to-date and 13.35% the past year. PMR touched down on its 50-day moving average to start the month, but has since elevated from this level.
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.
PMR and the retail sector in general was helped by a tailwind of positive economic data from the Commerce Department 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.”
For this school year, retail shops are expecting a robust shopping season as 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.
Related: Data Bodes Well for Retail ETFs
July’s increase in retail sales portends to the economy kicking off the third quarter in solid fashion after logging its best performance in nearly four years in the second quarter. This, backed by today’s record-setting S&P 500 level, suggest the economy is full steam ahead.
For more information on the consumer sector, visit our consumer discretionary category.