Retail ETFs and the Holiday Shopping Season

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As we enter the holiday season many people will begin to do their shopping sooner rather than later and that in turn is very exciting for many retail and e-commerce companies that look to gain off the increased holiday traffic. Because of the early Thanksgiving consumers will also have an extra week to shop. In this article we will be looking at a few ETFs in the retail and e-commerce space that could see positive gains with a robust shopping season.

  • ProShares Online Retail ETF (ONLN)

The first fund on our list is an e-commerce ETF looking to follow companies that have a market capitalization of at least $500 million and a six month daily average trading value of over $1 million. Online shopping has been used much more than it has in the past with companies like Amazon and Alibaba offering more efficient ways to view and purchase items. ONLN also has a relatively low expense ratio of 0.58% which leaves you with more money to buy those gifts. The top five holding of ONLN are, Amazon (AMZN) 19.34%, Alibaba Group (BABA) 11.01%, eBay Inc. (EBAY) 7.71%, Sea Ltd. (SE) 5.43%, and DoorDash Inc. (DASH) 5.30%.

  • SPDR S&P Retail ETF (XRT)

The next fund on our list offers exposure to physical retailers by using the S&P Retail Select Industry Index which follows the retail sector of the S&P Total Market Index. XRT tracks 98 different companies through a equal weighted index of small, mid, and large cap stocks. 98 companies is a lot but XRT offers exposure to a broad industry of retail companies in, apparel, automotive, electronics, drugs, food, general goods, and super centers. The top five holdings of XRT are, Victoria’s Secret (VSCO) 1.44%, Gap (GPS) 1.44%, Chico’s FAS (CHS) 1.43%, ODP Corporation (ODP) 1.40%, and American Eagle Outfitters (AEO) 1.36%.

  • ProShares Decline Of The Retail Store ETF (EMTY)

As the name suggests, this fund from ProShares looks to offer capital appreciation from the decline of brick-and-mortar retailers. EMTY does this by seeking the inverse (-1x) of the Solactive-ProShares Bricks and Mortar Retail Store Index for that given day. This offers investors a good way to hedge against unexpected drops. Due to the nature of EMTY, investors should track their holdings daily if possible since the compounding of daily returns means holding for greater than one day can post results far from the target return. The top five holdings of the underlying index are, Five Below Inc. (FIVE) 3.09%, BJ’s Wholesale Club (BJ) 2.92%, Dollar General (DG) 2.89%, Leslie’s Inc. (LESL) 2.87%, and O’Reilly Automotive Inc. (ORLY) 2.87%.

  • Direxion Daily Retail Bull 3X Shares (RETL)

The last fund on our list looks to leverage (3x) the performance of the S&P Retail Select Industry Index, following many different retailers in apparel, automotive, food, and speciality stores. Similar to EMTY, RETL will only seek the performance of its underlying index for that given day so holdings longer than one day shouldn’t be expected to reach the target. Leveraged and inverse funds come with the opportunity that other funds don’t have as they can stay agile through changing markets and can be easily liquidated. The top five holdings of the underlying index are, Poshmark (POSH) 1.35%, Leslie’s Inc. (LESL) 1.28%, O’Reilly Automotive (ORLY) 1.27%, Autozone (AZO) 1.27%, and Xometry (XMTR) 1.27%.


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