If you're interested in broad exposure to the Consumer Discretionary - Retail segment of the U.S. equity market, look no further than the SPDR S&P Retail ETF (XRT), a passively managed exchange traded fund launched on 06/19/2006.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Consumer Discretionary - Retail is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 9, placing it in bottom 44%.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $489.88 M, making it the largest ETF attempting to match the performance of the Consumer Discretionary - Retail segment of the U.S. equity market. XRT seeks to match the performance of the S&P Retail Select Industry Index before fees and expenses.
The S&P Retail Select Industry Index represents the retail sub-industry portion of the S&P TMI. The S&P TMI tracks all the U.S. common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Small Cap exchanges. The Retail Index is a modified equal weight index.
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.35%, making it the least expensive product in the space.
It has a 12-month trailing dividend yield of 1.56%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Consumer Discretionary sector--about 86.20% of the portfolio. Consumer Staples and Healthcare round out the top three.
Looking at individual holdings, Dsw Inc. Class A (DSW) accounts for about 1.44% of total assets, followed by Dollar General Corporation (DG) and Dick's Sporting Goods Inc. (DKS).
The top 10 holdings account for about 13.25% of total assets under management.
Performance and Risk
So far this year, XRT has added about 0.21%, and is up roughly 8.89% in the last one year (as of 04/11/2018). During this past 52-week period, the fund has traded between $37.93 and $48.91.
The ETF has a beta of 1.06 and standard deviation of 19.11% for the trailing three-year period, making it a medium risk choice in the space. With about 87 holdings, it effectively diversifies company-specific risk.
SPDR S&P Retail ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XRT is a great option for investors seeking exposure to the Consumer Discretionary ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
VanEck Vectors Retail ETF (RTH) tracks MVIS US Listed Retail 25 Index and the Amplify Online Retail ETF (IBUY) tracks EQM Online Retail Index. VanEck Vectors Retail ETF has $71.54 M in assets, Amplify Online Retail ETF has $279.33 M. RTH has an expense ratio of 0.35% and IBUY charges 0.65%.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center .
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 reportVANECK-RETAIL (RTH): ETF Research ReportsSPDR-SP RET ETF (XRT): ETF Research ReportsAMPL-ONLN RETL (IBUY): ETF Research ReportsDSW Inc. (DSW): Free Stock Analysis ReportDollar General Corporation (DG): Free Stock Analysis ReportDICK'S Sporting Goods, Inc. (DKS): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research