If you're interested in broad exposure to the Consumer Discretionary - Retail segment of the equity market, look no further than the VanEck Retail ETF (RTH), a passively managed exchange traded fund launched on 12/20/2011.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options 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 10, placing it in bottom 38%.
Index Details
The fund is sponsored by Van Eck. It has amassed assets over $209.38 million, making it one of the larger ETFs attempting to match the performance of the Consumer Discretionary - Retail segment of the equity market. RTH seeks to match the performance of the MVIS US Listed Retail 25 Index before fees and expenses.
The MVIS US Listed Retail 25 Index tracks the overall performance of companies involved in retail distribution, wholesalers, on-line, direct mail and TV retailers, multi-line retailers, specialty retailers and food and other staples retailers.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.35%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.98%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. 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 58.60% of the portfolio. Consumer Staples and Healthcare round out the top three.
Looking at individual holdings, Amazon.com Inc (AMZN) accounts for about 21.68% of total assets, followed by Costco Wholesale Corp (COST) and Walmart Inc (WMT).
The top 10 holdings account for about 73.42% of total assets under management.
Performance and Risk
The ETF return is roughly 9.05% and it's up approximately 16.41% so far this year and in the past one year (as of 07/29/2024), respectively. RTH has traded between $162.97 and $212.29 during this last 52-week period.
The ETF has a beta of 0.87 and standard deviation of 18.13% for the trailing three-year period, making it a medium risk choice in the space. With about 27 holdings, it has more concentrated exposure than peers.
Alternatives
VanEck Retail ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, RTH is an excellent 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.
Amplify Online Retail ETF (IBUY) tracks EQM Online Retail Index and the SPDR S&P Retail ETF (XRT) tracks S&P Retail Select Industry Index. Amplify Online Retail ETF has $152.14 million in assets, SPDR S&P Retail ETF has $393.29 million. IBUY has an expense ratio of 0.65% and XRT charges 0.35%.
Bottom Line
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 key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
Get it free >>VanEck Retail ETF (RTH): ETF Research Reports
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Walmart Inc. (WMT) : Free Stock Analysis Report
Costco Wholesale Corporation (COST) : Free Stock Analysis Report
SPDR S&P Retail ETF (XRT): ETF Research Reports
Amplify Online Retail ETF (IBUY): ETF Research Reports
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
