Retail ETFs Sizzling On Black Friday Deals

The holiday season has kicked off with Thanksgiving Day and now it’s time for Black Friday — one of the busiest shopping days of the year. Retailers are splurging on promotions, early-store openings, heavy discounts, as well as free shipping on online purchases to lure customers.

According to the National Retail Federation (NRF), more than 164 million Americans are expected to shop both in-store and online during the Thanksgiving weekend (spanning four days — Thanksgiving Day, Black Friday, Small Business Saturday and Sunday). Of them, 70% (115 million) are planning to shop on Black Friday. An improving economy, acceleration in the job market, increasing consumer confidence and high spending power will make Black Friday a huge success (see: all the Consumer Discretionary ETFs here).

Though e-commerce or online shopping has been a key source of sales in recent times, queuing up and camping out for Black Friday has become as much of an American tradition as the feast itself.

What’s Hot?

Black Friday sales bonanza both online and in stores is already in full swing as a number of retailers have offered their deals early. We have highlighted some of the best deals from retailers.

Amazon (NASDAQ:AMZN) is ahead of all retailers offering attractive deals across 30 product categories from Thanksgiving Day to Cyber Monday. The company introduced this as a “Black Friday Deals Week.” Some of the hottest deals include Echo Dot for $29.99 (save $20), All-New Echo for $79.99 (save $20), Echo Plus for $119.99 (save $30), Bose Noise Cancelling Headphones for $179 (save 40%), LG 55-inch 4K Ultra Smart OLED TV for $1,497 (save 35%), and Samsung (KS:005930) 55-Inch 4K Ultra HD Smart LED TV for $1198 (save 25%). The Nintendo Switch, the most popular current-gen gaming console, in grey version is available at just $299 (read: Amazon ETFs to Buy on Q3 Blowout Results).

Wal-Mart (NYSE:WMT) , the world's largest retailer, kicked off its big “Pre-Black Friday” sale on Nov 20. A few enticing deals are 55-inch Vizio 4K TV for $398, an Xbox One S bundled with two games for $249, a popular ASUS Zenbook for $479, Google (NASDAQ:GOOGL) Home Mini + $25 Shopping Offer for $29 (save $20), and a free $300 Walmart Gift Card with purchase of Apple’s iPhone X. The company is also offering new “Samsung Savings Event” that adds even more deals on Samsung TVs, sound bars, mobile devices and more (read: Wal-Mart ETFs to Buy on Blockbuster Q3 Results).

Best Buy (NYSE:BBY) also started offering Black Friday deals from Nov 20. Some of the biggest deals include 50-inch 4K Smart TV for $180 (save $320), a Google Home Mini for $30 (save $20 plus get a $10 gift card), up to $150 off a 10.5-inch iPad Pro, up to $120 off Apple (NASDAQ:AAPL) Watch Series 2 models, and the lowest price ever on the Philips Hue Color Starter Kit.

Target (NYSE:TGT) is promising the "lowest prices of the year" on video games, TVs and other electronics. The hot deals are an XBox One S 500 GB console for $190 (save $90 and get a $25 gift card), a 65-inch Samsung 4K TV for $850 (save $156) and urBeats Earbuds for $49.99 (save $50). Additionally, Target will provide a 20% off coupon to customers who spend $50 on Black Friday.

Kohl’s (NYSE:KSS) is offering some of the steepest discounts of any major retailer this Black Friday with PlayStation 4 for $200 (save $100), a diamond bracelet for $70 (save $230), a Google Home for $80 (save $50), or a Sky Rider HD camera drone for $50 (save $100). Additionally, a Disney castle toy or an indoor basketball game can be grabbed for just $20.

ETFs to Tap

All these attractive offers would boost retail sales and lead to a surge in stock prices in the days to follow. While an individual stock is certainly a great option to tap the Black Friday deals in the investment world, a basket approach through ETFs is diversified and more cost effective at lower risk. Below, we have highlighted retail ETFs that investors should stock up this weekend.

SPDR S&P Retail (MX:XRT) ETF XRT

This product tracks the S&P Retail Select Industry Index, holding 87 securities in its basket with none accounting for more than 1.61%. Apparel retail takes the top spot at one-fourth share while Internet & direct marketing, automotive retail, and specialty stores round off the next three spots with a double-digit allocation each. The fund has amassed $567.8 million in its asset base and charges 35 bps in annual fees. The fund has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.

VanEck Vectors Retail ETF (V:RTH)

This fund provides exposure to the 26 largest retail firms by tracking the MVIS US Listed Retail 25 Index. It is highly concentrated on the top firm, Amazon, at 18.6% while other firms hold no more than 7.6% share. The ETF has a certain tilt toward specialty retail, which accounts for 31% share while Internet & direct marketing (22%), hypermarkets (12%) and departmental stores (10%) round off the next three spots. The product has amassed $53.1 million in its asset base and charges 35 bps in annual fees. RTH has a Zacks ETF Rank #2 with a Medium risk outlook (read: 4 Strong Reasons to Buy Retail ETFs Ahead of Black Friday).

PowerShares Dynamic Retail Portfolio (V:PMR)

This fund follows the Dynamic Retail Intellidex Index. In total, the product holds 29 securities, with each holding less than 5.9% of assets. In terms of industrial exposure, specialty retail takes the top spot at 41%, while hypermarkets (14%), department stores (13%), and drug stores (10%) round off the top three positions. The fund has accumulated just $13.9 million in its asset base and charges 63 bps in fees per year. It carries a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.

First Trust Nasdaq Retail ETF FTXD

The fund follows the Nasdaq US Smart Retail Index and holds 48 stocks in its basket. It is moderately concentrated on components, with each firm holding less than 9.3% of assets. While broadline retailers make up for a bigger chunk at 27.2%, specialty retailers, apparel retailers, home improvement retailers and drug retailers also account for a double-digit allocation each. FTXD has accumulated $1 million in its asset base and has an expense ratio of 0.60%. It has a Zacks ETF Rank #2.

Amplify Online Retail ETF IBUY

This ETF has attracted $138.3 million in its asset base. It offers global exposure to companies that derive 70% or more revenues from online and virtual retail by tracking the EQM Online Retail Index. The fund is home to 38 stocks that are widely diversified, with each holding no more than 4.53% of assets. The product charges 65 bps in fees per year.

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Amazon.com, Inc. (AMZN): Free Stock Analysis Report

VANECK-RETAIL (RTH): ETF Research Reports

SPDR-SP RET ETF (XRT): ETF Research Reports

FT-NDQ RETAIL (FTXD): ETF Research Reports

AMPL-ONLN RETL (IBUY): ETF Research Reports

PWRSH-DYN RETL (PMR): ETF Research Reports

Best Buy Co., Inc. (BBY): Free Stock Analysis Report

Wal-Mart Stores, Inc. (WMT): Free Stock Analysis Report

Target Corporation (TGT): Free Stock Analysis Report

Kohl's Corporation (KSS): Free Stock Analysis Report

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