Retail ETFs To Watch

Investors seeking to make a targeted bet on the retail sector currently have three choices – SPDR S&P Retail ETF (XRT), Market Vectors Retail ETF (RTH) and PowerShares Dynamic Retail Portfolio (PMR). All three delivered strong returns of 31.9%, 26.12% and 30.36%, respectively, in the year-to-date period.

SPDR S&P Retail ETF
XRT is the most popular ETF in the retail space with AUM of over $1.1 billion and it tilts towards small cap securities. The fund follows the S&P Retail Select Industry Index and holds just less than 100 stocks in its portfolio.

The ETF is well spread across each security as none hold more than 1.36% of assets, thereby eliminating company specific risk. The ETF charges 35 bps a year in fees and has a Zacks Rank of 2 or ‘Buy’ rating with a ‘High’ risk outlook.

Market Vectors Retail ETF
Meanwhile, the Market Vectors Retail ETF provides exposure to the 26 largest firms by tracking the Market Vectors US Listed Retail 25 Index. In particular, the top three holdings are WMT, HD and Amazon.com (AMZN) and these combine to take up more than 24% of assets.

The product has amassed $42.5 million in its asset base so far in the year and charges 35 bps in annual fees. RTH currently has a Zacks Rank of 3 or ‘Hold’ rating with a ‘Low’ risk outlook.

PowerShares Dynamic Retail Portfolio
Coming to the PowerShares product, PMR tracks the Dynamic Retail Intellidex Index. This benchmark uses various investment criteria like price momentum, earnings momentum, quality, management action, and value to include stocks in the list.

With holdings of 30 stocks, the fund is somewhat concentrated on its top 10 holdings. Kroger (KR), Gap (GPS) and Whole Foods Market (WFM) occupy the top three spots in the basket with a combined 15.41% share.

The ETF has managed assets worth $39.4 million and charges 63 bps in fees and expenses. The product has a Zacks Rank of 1 or ‘Strong Buy’ rating with a ‘Medium’ risk outlook (read: 3 Hot Sector ETFs Surging to #1 Ranks).