Should You Invest in the VanEck Retail ETF (RTH)?
Launched on 12/20/2011, the VanEck Retail ETF (RTH) is a passively managed exchange traded fund designed to provide a broad exposure to the Consumer Discretionary - Retail segment of the equity market.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Additionally, sector ETFs offer convenient 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 13, placing it in bottom 19%.
Index Details
The fund is sponsored by Van Eck. It has amassed assets over $214.62 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
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 one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.95%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, 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 62.40% of the portfolio. Consumer Staples and Healthcare round out the top three.
Looking at individual holdings, Amazon.com Inc (AMZN) accounts for about 19.99% of total assets, followed by Home Depot Inc/the (HD) and Costco Wholesale Corp (COST).
The top 10 holdings account for about 70.90% of total assets under management.
Performance and Risk
So far this year, RTH has added roughly 11.96%, and is up about 35.81% in the last one year (as of 03/28/2024). During this past 52-week period, the fund has traded between $159.37 and $212.29.
The ETF has a beta of 0.88 and standard deviation of 18.18% 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 $183.05 million in assets, SPDR S&P Retail ETF has $564.19 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.
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VanEck Retail ETF (RTH): ETF Research Reports
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
The Home Depot, Inc. (HD) : 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
