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Look to Retail ETFs as the Economy, Consumer Spending Recovers


Retail sector-related exchange-traded funds are back under the spotlight as the holiday shopping season wraps up, and investors are betting on brick-and-mortar stores to maintain their momentum in anticipation of a full economic recovery in the new year.

The SPDR S&P Retail ETF (XRT) , which follows a range of traditional retailers, has increased 13.0% over the past month, and advanced 39.7% year-to-date. Some investors are hopeful that more traditional retailers could regain lost ground in the year ahead, betting on a broader economic rebound as vaccines against the coronavirus will spur widespread re-openings across the United States, Reuters reports .

“There’s anticipation of people shopping,” Kim Forrest, chief investment officer at Bokeh Capital Partners, told Reuters. “Wall Street is looking forward to a time when we are not locked down.” Investors will be closely watching the University of Michigan’s widely followed consumer sentiment index, which remains below pre-pandemic levels but recently pushed higher.

Some also argue that consumer spending could rise from additional stimulus checks to individuals, which is included in a $900 billion coronavirus aid package that Congress is working on, said Alex Ely, chief investment officer of Macquarie Investment Management’s small and mid-cap growth equity […]

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