Retail ETFs Decline as Thanksgiving Weekend Sales Drop

·5 min read

Americans have spent less this year over the five-day Thanksgiving weekend. According to a survey by the National Retail Federation (“NRF”), U.S. shoppers spent an average of $301 on holiday-related purchases such as gifts, décor, apparel and toys between Thanksgiving and Cyber Monday, down 3.5% year over year from $311.7 for the same period last year. This figure is also well below 2019’s average spending of $362.

Lower consumer spending has pushed down retail ETFs — SPDR S&P Retail ETF XRT, VanEck Vectors Retail ETF RTH, First Trust Nasdaq Retail ETF FTXD, Amplify Online Retail ETF IBUY and ProShares Online Retail ETF ONLN. These funds are down 7%, 3.4%, 5.4%, 3.6% and 3.3%, respectively, over the past week.

NRF also revealed that approximately 104.9 million people shopped in stores from Thanksgiving Day through Cyber Monday, up from 92.3 million in 2020. The number of people who shopped in stores grew 14% year on year to 104.9 million, as consumers were eager to return to brick-and-mortar purchasing. Meanwhile, the number of those shopping online decreased 12% to 127.8 million from 145.4 million last year (read: ETFs to Suffer as US Consumer Confidence Falls to a 9-Month Low).

Black Friday was the most popular day for both in-store and e-commerce spending. About 66.5 million consumers ventured to locations to purchase and 88 million bought online. Similar to recent years, Black Friday surpassed Cyber Monday in terms of total online shoppers as just 77 million shopped on Cyber Monday.

Clothing and accessories were the top gift choices over the holiday weekend, selected by 51% of respondents, while 32% bought toys, 28% snapped up gift cards and gift certificates, and 27% opted for books, music, movies or video games. Electronics were sought by 24% of those surveyed.

ETFs in Focus

SPDR S&P Retail ETF (XRT)

SPDR S&P Retail ETF tracks the S&P Retail Select Industry Index, which provides exposure across large, mid-and small-cap stocks. It holds well-diversified 107 stocks in its basket with none making up for more than 1.5% share. Additionally, SPDR S&P Retail ETF is well spread across various industries with a double-digit allocation each in apparel retail, Internet & direct marketing retail, automotive retail and specialty stores.

SPDR S&P Retail ETF is the largest and most popular in the retail space with AUM of $850.2 million and an average trading volume of 3.1 million shares. It charges 35 bps in annual fees. SPDR S&P Retail ETF has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.

VanEck Vectors Retail ETF (RTH)

VanEck Vectors Retail ETF provides exposure to the 25 largest retail firms by tracking the MVIS US Listed Retail 25 Index, which measures the performance of the companies involved in retail distribution, wholesalers, online, direct mail and TV retailers, multi-line retailers, specialty retailers and food and other staples retailers. VanEck Vectors Retail ETF is highly concentrated on the top two firms with double-digit exposure each while the other firms hold no more than 5.6% share.

VanEck Vectors Retail ETF has amassed $256.7 million in its asset base and charges 35 bps in annual fees. It trades in a lower volume of 22,000 shares a day on average. VanEck Vectors Retail ETF has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: 5 ETFs to Buy This Holiday Season for Gift of Good Returns).

First Trust Nasdaq Retail ETF (FTXD)

First Trust Nasdaq Retail ETF follows the Nasdaq US Smart Retail Index. It holds 51 stocks in its basket with each accounting for no more than 7.1% of assets. First Trust Nasdaq Retail ETF is slightly skewed toward specialty retail at 39%, while diversified retailers round off the next spot with 28.4% exposure.

First Trust Nasdaq Retail ETF has accumulated $26 million in its asset base and has an expense ratio of 0.60%. It trades in an average daily volume of 5,000 shares. First Trust Nasdaq Retail ETF carries a Zacks ETF Rank #3 (Hold).

Amplify Online Retail ETF (IBUY)

Amplify Online Retail ETF offers global exposure to companies that derive 70% or more revenues from online and virtual retail by tracking the EQM Online Retail Index. IBUY holds 79 stocks in its basket with none accounting for more than 2.6% of assets. Amplify Online Retail ETF has the largest allocation in traditional retail at 60.6% followed by 36.6% in the marketplace.

Amplify Online Retail ETF has attracted $789.1 million in its asset base and charges 65 bps in annual fees. IBUY trades in an average daily volume of 66,000 shares (read: 6 Stay-at-Home ETFs Likely to Gain on Renewed Lockdown Fears).

ProShares Online Retail ETF (ONLN)

ProShares Online Retail ETF offers exposure to companies that principally sell online or through other non-store channels, and then zeros in on companies that are reshaping the retail space. It tracks the ProShares Online Retail Index, holding 40 stocks in its basket. ONLN is highly concentrated on the top two firms while other firms hold no more than 4.2% of assets. American firms make up three-fourth of the portfolio, while Chinese firms account for 17.4% share.

ProShares Online Retail ETF has accumulated $759.8 million in its asset base and charges 58 bps in annual fees. ONLN trades in an average daily volume of 74,000 shares.


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SPDR S&P Retail ETF (XRT): ETF Research Reports
 
VanEck Retail ETF (RTH): ETF Research Reports
 
Amplify Online Retail ETF (IBUY): ETF Research Reports
 
First Trust NASDAQ Retail ETF (FTXD): ETF Research Reports
 
ProShares Online Retail ETF (ONLN): ETF Research Reports
 
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