Skip to main content

The 9 Best ETFs for Retail Power

By U.S. News & World Report

Retail stocks take center stage.

The fourth quarter typically is a boffo period for retail stocks. Many retailers are at their most productive during this three-month span, and the accompanying hype tends to drive retailers — and thus retail-focused exchange-traded funds — higher. Naturally, though, some retailers have off years, so buying one or two retail stocks in the hopes of getting a fourth-quarter bump could leave you disappointed. A better way to go? One of the following nine ETFs, which offer varying levels of exposure to the retail industry, and provide diversification (and thus protection) along the way.

SPDR S&P Retail ETF (ticker: XRT)

At roughly $470 million in total net assets, the XRT is the largest pure-play retail ETF on the market. The XRT is about as comprehensive an American-focused retail ETF as you could want, spanning apparel, food, electronics and other types of specialty retailers, as well as drug stores and supermarkets. Also, XRT is an equally weighted ETF, meaning each holding at rebalancing carries the same weight as every other holding. Thus, online e-commerce blue chip Amazon.com (AMZN) is weighted roughly the same as mid-cap automotive dealership network Lithia Motors (LAD).

Expenses: 0.35 percent, or $35 annually on every $10,000 invested

VanEck Vectors Retail ETF (RTH)

VanEck’s RTH is a younger, smaller retail-oriented exchange-traded fund than XRT, but it’s still well-bought at $120 million in net assets. It’s also more “traditional” in that it’s market cap-weighted, so the larger-capitalization holdings in this ETF are going to have the most effect on performance. Thus, a bet on RTH is a significant bet on Amazon, which is roughly 18 percent of the fund. Home Depot (HD) and Wal-Mart Stores (WMT) hold heavy sway, too, at 7.3 percent and 6.4 percent of the fund. One last note: China e-tailer JD.com (JD) has a 4 percent-plus weighting.

Expenses: 0.35 percent (after 7-basis-point fee waiver)

PowerShares Dynamic Retail Portfolio ETF (PMR)

PowerShares’ PMR is a concentrated portfolio of just 30 retail holdings selected based on a number of qualities, including “price momentum, earnings momentum, quality, management action, and value,” according to Invesco. The fund then uses a tiered, equal-weight system that results in a gap of just more than 5 percent for top holdings like Ross Stores (ROST) and Walgreens Boots Alliance (WBA) and 2.4 percent for bottom holding Gap (GPS). PMR does cover a great spectrum, though, also holding companies like wood products firm Boise Cascade Co. (BCC) and swimming supplies company Pool Corp. (POOL).

Expenses: 0.63 percent (after 25-basis-point fee waiver)

Amplify Online Retail ETF (IBUY)

Amplify’s IBUY ETF is a clear play on the growing field of online retailers, though this is far from a list of fly-by-night dot-coms. Expedia (EXPE) has been doing business since 1996 — when it was part of Microsoft Corp. (MSFT). Amazon was founded in 1996. Ebay (EBAY) has been around since 1995. IBUY holds these and younger companies like Etsy (ETSY) and Grubhub (GRUB) in a modified equal-weight portfolio that splits holdings into a U.S. pool that comprises 75 percent of the fund, and an international pool that represents the rest.

Expenses: 0.65 percent

Consumer Discretionary Select Sector SPDR Fund (XLY)

The XLY is one of a number of funds that can provide some retail exposure, though they’re muddied down with companies from other industries and even other sectors. For instance, about half of XLY’s portfolio is dedicated to retail stocks like Amazon — the ETF’s greatest weight at 14 percent — and Lowe’s Cos. (LOW). However, nearly a quarter of the fund is invested in media companies like Comcast Corp. (CMCSA) and Time Warner (TWX). Another 13 percent or so is in the hotels, restaurants and leisure sector. So the XLY, while a good and widely held fund, is far from a “mall ETF.”

Expenses: 0.14 percent

iShares U.S. Consumer Services ETF (IYC)

The iShares’ IYC is another consumer fund that’s only partially invested in retailing. Specifically, 55 percent of IYC’s assets are divided between the retailing sector and food and staples retailing, with another 23 percent in media. It’s hard not to furrow a brow over the fact that consumer services — which is in the name of the fund — actually represents just 15 percent of the ETF’s holdings. Even the other “services” industries make up just another 5 percent. But past those specifics, IYC’s top holdings — Amazon (at 11.4 percent), Comcast, Home Depot and Walt Disney Co. (DIS) — are similar to other U.S.-focused consumer discretionary funds.

Expenses: 0.44 percent

iShares Global Consumer Discretionary ETF (RXI)

The pickings are slim when it comes to internationally themed funds that have any significant weight in retail. In the case of iShares’ Global Consumer Discretionary ETF, you’re not only looking at just 32 percent exposure to retailing, but less than 50 percent of the fund is invested outside of the U.S. A lot of the RXI’s retail weight is buried in familiar faces like Amazon and Home Depot, and the largest international holdings — Toyota Motor Corp. (TM) and Daimler — are focused in autos, which make up the ETF’s second-largest industry weight.

Expenses: 0.47 percent

Global X China Consumer ETF (CHIQ)

Global X’s CHIQ is a rare single-country ETF that has a significant weighting in retail (25 percent). CHIQ holds 39 companies that include a few names known stateside, such as Alibaba Group Holding (BABA), as well as auto manufacturer BYD Co. and online travel portal Ctrip (CTRP). CHIQ has been a frustrating fund, off 25 percent since inception in late 2009. However, its exposure to consumer discretionary and staples stocks are widely seen as a way to play the growing Chinese middle class. Perhaps its 20 percent rebound off the February 2016 lows is the start of that long-awaited bull run.

Expenses: 0.65 percent

Direxion Daily Retail Bull 3x Shares ETF (RETL)

If you’re high on retail heading into the fourth quarter, the RETL will let you make an aggressive bet on that belief. The RETL attempts to produce 300 percent the daily performance of the Russell 1000 Retail index, a cap-weighted index that includes Amazon at more than 25 percent. But know that 3x daily leverage can lead to longer-term performance that is not 3x the index, and the ability to triple your returns includes the danger of tripling your losses. This is only a short-term trade that requires a close watch.

Expenses: 0.95 percent (with 7-basis-point fee waiver)

More from U.S. News

6 Strategies to Avoid Working in Retirement

13 Tips for Singles Nearing Retirement

20 Awesome Dividend Stocks for Guaranteed Income

The 9 Best ETFs for Retail Power originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
Read Next Story

Related News

Frustration grows in Venezuela as earthquake death toll reaches 1,430

Israel and Lebanon sign framework agreement with US in ‘first step’ toward peace, Rubio says

Trump-endorsed populist poised to become Colombia’s next president as rival challenges vote