Designed to provide broad exposure to the Consumer Discretionary - Retail segment of the equity market, the SPDR SP Retail ETF (XRT) is a passively managed exchange traded fund launched on 06/19/2006.
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.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Consumer Discretionary - Retail is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 12, placing it in bottom 25%.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $437.66 million, making it one of the larger ETFs attempting to match the performance of the Consumer Discretionary - Retail segment of the 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.
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.35%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.14%.
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 87.70% of the portfolio, followed by Consumer Staples.
Looking at individual holdings, Gamestop Corp. Class A (GME) accounts for about 1.88% of total assets, followed by Magnite Inc. (MGNI) and Carvana Co. Class A (CVNA).
The top 10 holdings account for about 15.16% of total assets under management.
Performance and Risk
Year-to-date, the SPDR SP Retail ETF has added roughly 17.58% so far, and it's up approximately 21.34% over the last 12 months (as of 11/08/2020). XRT has traded between $26.99 and $54.88 in this past 52-week period.
The ETF has a beta of 1.40 and standard deviation of 28.63% for the trailing three-year period, making it a medium risk choice in the space. With about 86 holdings, it effectively diversifies company-specific risk.
SPDR SP 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, 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.
ProShares Online Retail ETF (ONLN) tracks PROSHARES ONLINE RETAIL INDEX and the Amplify Online Retail ETF (IBUY) tracks EQM Online Retail Index. ProShares Online Retail ETF has $732.60 million in assets, Amplify Online Retail ETF has $1.12 billion. ONLN has an expense ratio of 0.58% 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.
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SPDR SP Retail ETF (XRT): ETF Research Reports
GameStop Corp. (GME) : Free Stock Analysis Report
Amplify Online Retail ETF (IBUY): ETF Research Reports
Carvana Co. (CVNA) : Free Stock Analysis Report
ProShares Online Retail ETF (ONLN): ETF Research Reports
The Rubicon Project, Inc. (MGNI) : Free Stock Analysis Report
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