Making matters worse are the struggles of some big-name brick-and-mortar retailers, including Sears Holding (NASDAQ: SHLD), which some retail sector observers fear is on the brink of collapse. A similar sentiment has recently been applied to J.C. Penney (NYSE: JCP). Those scenarios are proof that investors need to be selective with retail ETFs. For its part, RTH is home to some of the retailers that are delivering for investors this year.
“The retailers best positioned to maintain or grow their market share are those with sufficient scale, cash flow generation and financial flexibility to invest in its business, an effective operating strategy and a right-sized physical footprint for its category. A well-developed omni-channel model is key in the quest for market share and Fitch believes Nordstrom, Macy’s and Walmart are amongst the furthest along in their omni-channel model development,” according to Fitch Ratings.
Wal-Mart Stores (NYSE:WMT), one of the best-performing members of the Dow Jones Industrial Average this year, is RTH’s third-largest holding at a weight of 6.7%. Home Depot Inc. (NYSE:HD), another Dow stalwart, is RTH’s second-largest holding at 7.6%.
For more information on the consumer sector, visit our consumer discretionary category.