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U.S. retail sales gained 0.7% sequentially in August 2021, following an upwardly revised 1.8% drop-off in July and breezing past market expectations of a 0.8% decline, as demand for goods remained strong despite the del ta variant of Covid-19 surge. Back-to-school shopping and child tax credit payments from the government are deemed to be the drivers, per Reuters.
Consumer spending makes up about 70% of U.S. economic activity. Thus, any massive jump in it will likely brighten the economic growth picture. Below we highlight a few areas and the related ETFs that benefited the most.
Winning Sectors
Non-Store Retailers
Sales of this category rose 5.3% sequentially. Year over year, sales were up 7.5%. Consumers’ interest in buying products online amid rising virus cases kept the demand high for the segment.
The Zacks Rank #1 (Strong Buy) company is an e-commerce fashion company. It markets and sells men's and women's designer apparels, shoes and accessories.
The underlying ProShares Online Retail Index is a specialized retail index that tracks retailers that principally sell online or through other non-store channels. The fund charges 58 bps in fees.
Furniture & Home Furnishing Stores
Sales jumped 3.7% sequentially in the month and 15.6% year over year.
The Zacks Rank #3 company is the world’s largest home improvement specialty retailer with 2,298 retail stores across the globe as of the end of second-quarter fiscal 2021.
The underlying 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. The fund charges 35 bps in fees.
General Merchandise Store
Sales gained 3.5% sequentially in the month and 15.5% year over year. Sales at department stores gained 2.4% sequentially and 28.6% year over year.
The underlying 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. It charges 35 bps in fees.
Food & Beverage Places
Sales of this category gained 1.8% sequentially in August and 5.7% year over year.
The underlying Dynamic Food & Beverage Intellidex Index is comprised of stocks of 30 U.S. food and beverage companies. These are companies that are principally engaged in the manufacture, sale or distribution of food and beverage products, agricultural products and products related to the development of new food technologies. The fund charges 63 bps in fees.
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August Retail Sales Shine: ETFs & Stocks to Win
U.S. retail sales gained 0.7% sequentially in August 2021, following an upwardly revised 1.8% drop-off in July and breezing past market expectations of a 0.8% decline, as demand for goods remained strong despite the del ta variant of Covid-19 surge. Back-to-school shopping and child tax credit payments from the government are deemed to be the drivers, per Reuters.
Consumer spending makes up about 70% of U.S. economic activity. Thus, any massive jump in it will likely brighten the economic growth picture. Below we highlight a few areas and the related ETFs that benefited the most.
Winning Sectors
Non-Store Retailers
Sales of this category rose 5.3% sequentially. Year over year, sales were up 7.5%. Consumers’ interest in buying products online amid rising virus cases kept the demand high for the segment.
Revolve Group, Inc. (RVLV - Free Report)
The Zacks Rank #1 (Strong Buy) company is an e-commerce fashion company. It markets and sells men's and women's designer apparels, shoes and accessories.
ProShares Online Retail ETF (ONLN - Free Report)
The underlying ProShares Online Retail Index is a specialized retail index that tracks retailers that principally sell online or through other non-store channels. The fund charges 58 bps in fees.
Furniture & Home Furnishing Stores
Sales jumped 3.7% sequentially in the month and 15.6% year over year.
The Home Depot Inc. (HD - Free Report)
The Zacks Rank #3 company is the world’s largest home improvement specialty retailer with 2,298 retail stores across the globe as of the end of second-quarter fiscal 2021.
SPDR S&P Retail ETF (XRT - Free Report)
The underlying 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. The fund charges 35 bps in fees.
General Merchandise Store
Sales gained 3.5% sequentially in the month and 15.5% year over year. Sales at department stores gained 2.4% sequentially and 28.6% year over year.
Walmart Inc. (WMT - Free Report)
Walmart Inc. has evolved from just being a traditional brick-and-mortar retailer into an omnichannel player. The stock has a Zacks Rank #2.
VanEck Retail ETF (RTH - Free Report)
The underlying 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. It charges 35 bps in fees.
Food & Beverage Places
Sales of this category gained 1.8% sequentially in August and 5.7% year over year.
The Kroger Co. (KR - Free Report)
Zacks Rank #2 company operates in the thin-margin grocery industry.
Invesco Dynamic Food & Beverage ETF (PBJ - Free Report)
The underlying Dynamic Food & Beverage Intellidex Index is comprised of stocks of 30 U.S. food and beverage companies. These are companies that are principally engaged in the manufacture, sale or distribution of food and beverage products, agricultural products and products related to the development of new food technologies. The fund charges 63 bps in fees.