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Is SPDR S&P Retail ETF (XRT) a Strong ETF Right Now?
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The SPDR S&P Retail ETF (XRT - Free Report) made its debut on 06/19/2006, and is a smart beta exchange traded fund that provides broad exposure to the Consumer Discretionary ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by State Street Global Advisors. XRT has been able to amass assets over $844.80 million, making it one of the larger ETFs in the Consumer Discretionary ETFs. This particular fund, before fees and expenses, seeks to match the performance of the S&P Retail Select Industry Index.
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.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.35% for XRT, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.69%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
This ETF has heaviest allocation in the Consumer Discretionary sector - about 88.80% of the portfolio. Consumer Staples and Telecom round out the top three.
Taking into account individual holdings, Gamestop Corp. Class A (GME - Free Report) accounts for about 8.69% of the fund's total assets, followed by Magnite Inc. (MGNI - Free Report) and Signet Jewelers Limited (SIG - Free Report) .
Its top 10 holdings account for approximately 22.17% of XRT's total assets under management.
Performance and Risk
The ETF has added about 43.98% and is up about 141.75% so far this year and in the past one year (as of 05/20/2021), respectively. XRT has traded between $39.02 and $95.19 during this last 52-week period.
The ETF has a beta of 1.40 and standard deviation of 31.99% for the trailing three-year period, making it a medium risk choice in the space. With about 96 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P Retail ETF is an excellent option for investors seeking to outperform the Consumer Discretionary ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
ProShares Online Retail ETF (ONLN - Free Report) tracks PROSHARES ONLINE RETAIL INDEX and the Amplify Online Retail ETF (IBUY - Free Report) tracks EQM Online Retail Index. ProShares Online Retail ETF has $1.02 billion in assets, Amplify Online Retail ETF has $1.19 billion. ONLN has an expense ratio of 0.58% and IBUY charges 0.65%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Consumer Discretionary ETFs.
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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Is SPDR S&P Retail ETF (XRT) a Strong ETF Right Now?
The SPDR S&P Retail ETF (XRT - Free Report) made its debut on 06/19/2006, and is a smart beta exchange traded fund that provides broad exposure to the Consumer Discretionary ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by State Street Global Advisors. XRT has been able to amass assets over $844.80 million, making it one of the larger ETFs in the Consumer Discretionary ETFs. This particular fund, before fees and expenses, seeks to match the performance of the S&P Retail Select Industry Index.
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.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.35% for XRT, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.69%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
This ETF has heaviest allocation in the Consumer Discretionary sector - about 88.80% of the portfolio. Consumer Staples and Telecom round out the top three.
Taking into account individual holdings, Gamestop Corp. Class A (GME - Free Report) accounts for about 8.69% of the fund's total assets, followed by Magnite Inc. (MGNI - Free Report) and Signet Jewelers Limited (SIG - Free Report) .
Its top 10 holdings account for approximately 22.17% of XRT's total assets under management.
Performance and Risk
The ETF has added about 43.98% and is up about 141.75% so far this year and in the past one year (as of 05/20/2021), respectively. XRT has traded between $39.02 and $95.19 during this last 52-week period.
The ETF has a beta of 1.40 and standard deviation of 31.99% for the trailing three-year period, making it a medium risk choice in the space. With about 96 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P Retail ETF is an excellent option for investors seeking to outperform the Consumer Discretionary ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
ProShares Online Retail ETF (ONLN - Free Report) tracks PROSHARES ONLINE RETAIL INDEX and the Amplify Online Retail ETF (IBUY - Free Report) tracks EQM Online Retail Index. ProShares Online Retail ETF has $1.02 billion in assets, Amplify Online Retail ETF has $1.19 billion. ONLN has an expense ratio of 0.58% and IBUY charges 0.65%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Consumer Discretionary ETFs.
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.