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Forget Spooky Market, 4 Halloween ETF Treats for Investors


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Fear before Halloween is understandable, especially with October seeing one of the wildest stock market gyrations. But the road is possibly not as thorny as it is right now. Though rising rate concerns and U.S.-Sino trade tensions will keep playing foul occasionally, the fears will probably be oversold by next month.

Investors should note that unlike the real event, the effect of Halloween on the market is not at all scary. In fact, instead of tricking investors, the Halloween Effect is usually a treat. The Halloween Effect is a historically observed increase in stock prices from the month of November through the end of April. It is exactly opposite the popular adage "sell in May and then walk away" which refers to the six months between May 1 and Oct 31.

Retail sales particularly deserve a special mention this time around. Vacations, holiday season buying (both Christmas and spring season) and seasonal optimism may play a huge role in this surge.

Spending At the Second Highest This Halloween

National Retail Federation estimated that Americans will likely spend a staggering $9 billion this Halloween, almost the same as that of $9.1 billion registered last year. This year's figure marks the second highest in the survey's 14-year history.

Consumers are expected to expend $86.79 on average, up from last year's $86.13. Costumes will account for the largest share of spending, in billions, though just 68% of consumers will likely go for them. On the other hand, 95% will likely shell out around $2.6 billion on candies. As much as 74% of consumers will spend about $2.7 billion on decorations and 35% will pay nearly $400 million for greeting cards.

Needless to say, retail sales will be on a roll in the upcoming days and put the following ETFs and stocks in focus.

ETF Picks

First Trust Nasdaq Retail ETF FTXD

As much as 45% Halloween shopping will be done at discount stores. So, discount retailer stock-heavy funds are in the spotlight now. Kohls Corp KSS and Wal-Mart WMT have considerable weight in the fund.

VanEck Vectors Retail ETF RTH

Several discount retailers like Costco COST , Ross ROST , Dollar General DG and WMT have solid exposure to this fund. Plus, 25% will hit department stores and 24% will head grocery/supermarket stores, making this broader retail ETF a perfect buy for Halloween (read: Amazon Beats on Q3 Earnings, Guides Weak: ETFs to Watch ).

Global X Social Media ETF SOCL

About  35%  of consumers will look for perfect costume idea online while 19% will look up in Pinterest and 16% will turn to Facebook FB) and 15% will be driven by YouTube. So, online ETF SOCL is highly in focus now (read:  Twitter Jumps Most in 8 Months on Q3 Results: ETFs to Tap ).

Amplify Online Retail ETF IBUY

The afore-mentioned arguments make it necessary to look at the $400.5-million fund that has 39 stocks in its portfolio. After all, 24% shopping will likely be done online (read: Guide to E-commerce ETFs ).

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AMPL-ONLN RETL (IBUY): ETF Research Reports

GLBL-X SOCL MDA (SOCL): ETF Research Reports

FT-NDQ RETAIL (FTXD): ETF Research Reports

VANECK-RETAIL (RTH): ETF Research Reports

Walmart Inc. (WMT): Free Stock Analysis Report

Costco Wholesale Corporation (COST): Free Stock Analysis Report

Ross Stores, Inc. (ROST): Free Stock Analysis Report

Dollar General Corporation (DG): Free Stock Analysis Report

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

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Zacks Investment Research

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

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , ETFs
Referenced Symbols: IBUY , SOCL , FTXD , RTH , WMT



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