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6 ETF Areas & Stocks to Win on Upbeat August Retail Sales
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Retail sales in the United States grew 0.6% sequentially in August 2023, higher than a downwardly revised 0.5% rise in July and beating forecasts of a 0.2% increase. The data continues to point to robust consumer spending despite high prices and borrowing costs. Below, we have highlighted a few areas and the related ETFs that may benefit handsomely.
Clothing
Sales in this segment increased 1.3% year over year and 0.9% sequentially.
SPDR S&P Retail ETF (XRT - Free Report) – 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 fund, which invests about 20% in clothing stocks, charges 35 bps in fees.
American Eagle Outfitters (AEO - Free Report) – The Zacks Rank #1 (Strong Buy) company is a specialty retailer of casual apparel, accessories and footwear for men and women aged 15–25 years.
Motor Vehicle & Parts Dealers
Sales of this category gained 0.3% sequentially in August and rose 4.4% year over year.
First Trust S-Network Future Vehicles & Technology ETF (CARZ - Free Report) follows the S-Network Electric & Future Vehicle Ecosystem Index. Constituents are chosen by selecting the eligible Pure-Play companies in descending order of float-adjusted market capitalization until 100 constituents have been selected.
Group 1 Automotive Inc. (GPI - Free Report) is one of the leading automotive retailers in the world, with operations primarily located in the United States and the UK. The stock presently has a Zacks Rank #2 (Buy).
Food Services and Drinking Places
Sales at restaurants and bars increased 8.5% year over year and 0.3% sequentially.
AdvisorShares Restaurant ETF (EATZ - Free Report) – The AdvisorShares Restaurant ETF is an actively managed exchange-traded fund that seeks to achieve its investment objective by investing at least 80% of its net assets in securities of companies that derive at least 50% of their net revenue from the restaurant business. The fund charges 99 bps in fees.
McDonald's (MCD - Free Report) – The company is a leading fast-food chain that currently operates more than 39,000 restaurants in more than 100 countries. The stock currently has a Zacks Rank #2.
Health & Personal Care Stores
Sales in this segment increased 7.8% year over year and 0.5% sequentially.
Global X Funds Global X Health – The underlying Indxx Global Health & Wellness Thematic Index tracks the performance of companies listed in developed markets that provide products and services aimed at promoting physical wellness through active and healthy lifestyles, including but not limited to fitness equipment and technology, athletic apparel, nutritional supplements, and organic/ natural food offerings. The fund charges 50 bps in fees.
Unilever (UL - Free Report) – The company is engaged in manufacturing of branded and packaged consumer goods, including food, detergents and personal care products. The company also has interests in specialty chemicals. The stock has a Zacks Rank #3 (Hold) at present.
Electronics & Appliance Stores
Sales gained 0.7% sequentially but slumped 1.8% year over year. A rise in electronics sales should go in favor of semiconductor funds and stocks.
VanEck Vectors Semiconductor ETF (SMH - Free Report) – The underlying MVIS US Listed Semiconductor 25 Index tracks the overall performance of companies involved in semiconductor production and equipment. The fund charges 35 bps in fees.
Best Buy (BBY - Free Report) – As far as stocks are concerned, investors can take a look at BBY. It is a multinational specialty retailer of consumer electronics, home office products, entertainment software, communication, food preparation, wellness, health, security, appliances and related services. The stock currently has a Zacks Rank #3.
General Merchandise & Grocery Stores
General merchandise stores see a year-over-year sales increase of 2% while sales in this category rose 0.3% month over month. Meanwhile, grocery stores’ sales rose 2.1% year over year and gained 0.4% sequentially.
Consumer Staples Select Sector SPDR ETF (XLP - Free Report) – The Consumer Staples Select Sector Index seeks to provide an effective representation of the consumer staples sector of the S&P 500 Index. The fund charges 10 bps in fees. The fund has a Zacks Rank #2 at present.
Walmart (WMT - Free Report) – The Zacks Rank #2 company has evolved from a traditional brick-and-mortar retailer to an omnichannel player.
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6 ETF Areas & Stocks to Win on Upbeat August Retail Sales
Retail sales in the United States grew 0.6% sequentially in August 2023, higher than a downwardly revised 0.5% rise in July and beating forecasts of a 0.2% increase. The data continues to point to robust consumer spending despite high prices and borrowing costs. Below, we have highlighted a few areas and the related ETFs that may benefit handsomely.
Clothing
Sales in this segment increased 1.3% year over year and 0.9% sequentially.
SPDR S&P Retail ETF (XRT - Free Report) – 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 fund, which invests about 20% in clothing stocks, charges 35 bps in fees.
American Eagle Outfitters (AEO - Free Report) – The Zacks Rank #1 (Strong Buy) company is a specialty retailer of casual apparel, accessories and footwear for men and women aged 15–25 years.
Motor Vehicle & Parts Dealers
Sales of this category gained 0.3% sequentially in August and rose 4.4% year over year.
First Trust S-Network Future Vehicles & Technology ETF (CARZ - Free Report) follows the S-Network Electric & Future Vehicle Ecosystem Index. Constituents are chosen by selecting the eligible Pure-Play companies in descending order of float-adjusted market capitalization until 100 constituents have been selected.
Group 1 Automotive Inc. (GPI - Free Report) is one of the leading automotive retailers in the world, with operations primarily located in the United States and the UK. The stock presently has a Zacks Rank #2 (Buy).
Food Services and Drinking Places
Sales at restaurants and bars increased 8.5% year over year and 0.3% sequentially.
AdvisorShares Restaurant ETF (EATZ - Free Report) – The AdvisorShares Restaurant ETF is an actively managed exchange-traded fund that seeks to achieve its investment objective by investing at least 80% of its net assets in securities of companies that derive at least 50% of their net revenue from the restaurant business. The fund charges 99 bps in fees.
McDonald's (MCD - Free Report) – The company is a leading fast-food chain that currently operates more than 39,000 restaurants in more than 100 countries. The stock currently has a Zacks Rank #2.
Health & Personal Care Stores
Sales in this segment increased 7.8% year over year and 0.5% sequentially.
Global X Funds Global X Health – The underlying Indxx Global Health & Wellness Thematic Index tracks the performance of companies listed in developed markets that provide products and services aimed at promoting physical wellness through active and healthy lifestyles, including but not limited to fitness equipment and technology, athletic apparel, nutritional supplements, and organic/ natural food offerings. The fund charges 50 bps in fees.
Unilever (UL - Free Report) – The company is engaged in manufacturing of branded and packaged consumer goods, including food, detergents and personal care products. The company also has interests in specialty chemicals. The stock has a Zacks Rank #3 (Hold) at present.
Electronics & Appliance Stores
Sales gained 0.7% sequentially but slumped 1.8% year over year. A rise in electronics sales should go in favor of semiconductor funds and stocks.
VanEck Vectors Semiconductor ETF (SMH - Free Report) – The underlying MVIS US Listed Semiconductor 25 Index tracks the overall performance of companies involved in semiconductor production and equipment. The fund charges 35 bps in fees.
Best Buy (BBY - Free Report) – As far as stocks are concerned, investors can take a look at BBY. It is a multinational specialty retailer of consumer electronics, home office products, entertainment software, communication, food preparation, wellness, health, security, appliances and related services. The stock currently has a Zacks Rank #3.
General Merchandise & Grocery Stores
General merchandise stores see a year-over-year sales increase of 2% while sales in this category rose 0.3% month over month. Meanwhile, grocery stores’ sales rose 2.1% year over year and gained 0.4% sequentially.
Consumer Staples Select Sector SPDR ETF (XLP - Free Report) – The Consumer Staples Select Sector Index seeks to provide an effective representation of the consumer staples sector of the S&P 500 Index. The fund charges 10 bps in fees. The fund has a Zacks Rank #2 at present.
Walmart (WMT - Free Report) – The Zacks Rank #2 company has evolved from a traditional brick-and-mortar retailer to an omnichannel player.