Megaphone icon ETF Database is now VettaFi. Read More >
ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • Entrepreneur ETF
    • Equity ETF
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Future ETFs
    • Gold & Silver Investing
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Modern Alpha
    • Multi-Asset
    • Multi-Factor
    • Nasdaq Investment Intelligence
    • Portfolio Strategies
    • Retirement Income
    • Smart Beta
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Videos & Podcasts
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. ETF of the Week: SPDR S&P Retail ETF, XRT
News
Share

ETF of the Week: SPDR S&P Retail ETF, XRT

Aaron NeuwirthMar 19, 2021
2021-03-19

ETF Trends CEO Tom Lydon discussed the SPDR S&P Retail ETF (XRT A) on this week’s “ETF of the Week” podcast with Chuck Jaffe on the MoneyLife Show.

This ETF offers exposure to the U.S. retail industry, a targeted sub-sector of the consumer discretionary space that may appeal to investors looking to bet on increased consumer consumption in the domestic market. XRT is probably too targeted for any investor with a long-term buy-and-hold strategy but may have appeal for those looking to implement a sector rotation strategy or overweight high beta corners of the U.S. market.

As the economy is on a stronger pace towards being reopened and life returns to normal, once the downtrodden plays like the retail sector are bouncing back. XRT is up 16% on a 1-week return; and up 44% on a YTD return. In comparison, the S&P 500 is up 4.5% on a 1-week return and up 5.3% YTD. There are still relatively attractive valuations, despite recent run-up as well.

With a growing optimism for retail, vaccine efforts and fiscal/monetary stimulus are fueling bets of a return to economic growth. Retail is seen as a recovery play after the post-pandemic rebound left this sector in the dust for much of 2020. Hopefully, retail can capitalize on pent-up consumer demand. To stay competitive, many traditional retailers have enhanced their online presence and improve the eCommerce shopping experience during Covid.


Content continues below advertisement

Retail Sales Rebounding

Retail sales are expected to grow this year between 6.5% and 8.2%, amounting to more than $4.33 trillion in sales, the National Retail Federation said in its annual forecast. The U.S. economy is expected to see its fastest growth in more than two decades. While eCommerce grew due to the Covid pandemic and shut-in orders, traditional retail is still a large part of the economy. NRF forecasts eCommerce sales will grow between 18% and 23%, to between $1.14 trillion and $1.19 trillion in sales.

Additionally, as Americans become more comfortable traveling again and attending social gatherings, more money will be spent on services, which normally account for 70% of consumer spending. According to research from S&P Global Market Intelligence, foot traffic to malls was already improving late in the summer despite the pandemic, with outdoor malls faring best even then, according to research from S&P Global Market Intelligence.

Currently, GameStop GME makes up 14.7% of XRT’s holdings. GME shares are up 1,280% YTD, contributing to XRT’s gains this year. GameStop’s record-setting rally caused GME’s weight in XRT to climb to 20%, which is a far cry from the video game retailer’s original weight of around 1%. The retail ETF follows a modified equally weighted indexing methodology.

GameStop’s meteoric rise may be attributed to a Subgroup of the Reddit community called WallStreetBets that has effectively cornered a segment of the market in a bid to target outsized institutional-sized investors with a huge short position on the company. If enough people pile into a single stock, the prices rise rapidly. While this is normal for any security, GameStop also has a huge short interest or people betting on the stock’s fall. As GME’s price rises too quickly, short-sellers may be forced to buy back into the position to cover their losses – a short squeeze.

Listen to the full podcast episode on the XRT ETF:

For more podcast episodes featuring Tom Lydon, visit our podcasts category.

This article originally appeared on ETFTrends.com.

» Popular Pages

  • Tickers
  • Articles

Jun 24

As Inflation Rises, Try Equal Weighting Equity Holdings

Jun 24

Cybersecurity Investments Could be an Opportunity

Jun 24

Diversifying During Rate Hikes With a Real Estate ETF

Jun 24

Don't Ever Bet Against the S&P 500

Jun 24

Have We Reached Rock Bottom?

Jun 24

Coinbase Poised to Launch Derivatives Product

Jun 24

Any Time is the Right Time to Begin Investing

Jun 24

American Century’s Sandra Testani

Jun 24

Exxon Demands Higher Carbon Tax: This Fund Benefits

Jun 24

Gender Matters When it Comes to Retirement Planning

QQQ

Invesco QQQ Trust

SPY

SPDR S&P 500 ETF Trust

VOO

Vanguard S&P 500 ETF

ARKK

ARK Innovation ETF

VTI

Vanguard Total Stock Market...

XLE

Energy Select Sector SPDR...

VYM

Vanguard High Dividend Yield...

IVV

iShares Core S&P 500 ETF

SCHD

Schwab US Dividend Equity ETF...

XLK

Technology Select Sector SPDR...


Content continues below advertisement

Loading Articles...
Help & Info
  • Contact Us
  • Mission Statement
  • Press
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © ETF Flows LLC
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X