Should You Invest in the SPDR S&P Retail ETF (XRT)?
The SPDR S&P Retail ETF (XRT) was launched on 06/19/2006, and is a passively managed exchange traded fund designed to offer broad exposure to the Consumer Discretionary - Retail segment of the equity market.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Consumer Discretionary - Retail is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 8, placing it in top 50%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $757.35 million, making it one of the average sized ETFs attempting to match the performance of the Consumer Discretionary - Retail segment of the equity market. XRT seeks to match the performance of the S&P Retail Select Industry Index before fees and expenses.
The S&P Retail Select Industry Index represents the retail sub-industry portion of the S&P TMI. The S&P TMI tracks all the U.S. common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Small Cap exchanges. The Retail Index is a modified equal weight index.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.35%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.68%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Consumer Discretionary sector--about 88.60% of the portfolio. Consumer Staples and Telecom round out the top three.
Looking at individual holdings, Gamestop Corp. Class A (GME) accounts for about 8.69% of total assets, followed by Magnite Inc. (MGNI) and Signet Jewelers Limited (SIG).
The top 10 holdings account for about 22.17% of total assets under management.
Performance and Risk
The ETF has added about 47.40% so far this year and is up roughly 120.19% in the last one year (as of 06/18/2021). In that past 52-week period, it has traded between $41.24 and $96.63.
The ETF has a beta of 1.40 and standard deviation of 32.02% for the trailing three-year period, making it a medium risk choice in the space. With about 96 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P Retail ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XRT is an excellent option for investors seeking exposure to the Consumer Discretionary ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
ProShares Online Retail ETF (ONLN) tracks PROSHARES ONLINE RETAIL INDEX and the Amplify Online Retail ETF (IBUY) tracks EQM Online Retail Index. ProShares Online Retail ETF has $1.08 billion in assets, Amplify Online Retail ETF has $1.28 billion. ONLN has an expense ratio of 0.58% and IBUY charges 0.65%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
SPDR S&P Retail ETF (XRT): ETF Research Reports
GameStop Corp. (GME) : Free Stock Analysis Report
Signet Jewelers Limited (SIG) : Free Stock Analysis Report
Amplify Online Retail ETF (IBUY): ETF Research Reports
ProShares Online Retail ETF (ONLN): ETF Research Reports
Magnite, Inc. (MGNI) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
