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The United States witnessed a substantial economic growth in the third quarter of 2023, with the real gross domestic product (GDP) growing at an annual rate of 4.9%, beating the economists’ expectations of 4.7%. Consumer spending was one of the main contributors to the U.S. GDP growth. The GDP increase marked the largest gain since the fourth quarter of 2021.
Consumer spending, as measured by personal consumption expenditures, improved 4% in the quarter after rising just 0.8% in Q2, and was responsible for 2.7 percentage points of the total GDP increase. The consumer was responsible for about 68% of GDP in Q3. Consumer spending was noticed at both goods and services, with the two measures up 4.8% and 3.6%, respectively.
Durable goods orders grew 4.7% in September, way higher than the 0.1% gain in August and the 2% forecast, according to the Commerce Department. Orders for durables, which include appliances, aircraft and electronics marked their biggest gain since July 2020.
Michael Arone, chief investment strategist for U.S. SPDR Business at State Street Global Advisors, said “this report confirmed what we already knew: The consumer went on a shopping spree in the third quarter,” as quoted on CNBC.
Notably, U.S. retail sales grew 0.7% sequentially in September 2023, following an upwardly revised 0.8% rise in August and beating forecasts of a 0.3% advance. The retail sales data pointed to robust consumer spending despite high prices and borrowing costs.
Holiday Season Shopping Makes Consumer ETFs a Buy
A report from Adobe Analytics shows that online sales during the holiday season are projected to jump 4.8% year over year. Also, sales are anticipated to grow at a faster pace and hit $221.8 billion between Nov 1 and Dec 31, which includes key shopping days like Cyber Monday, Thanksgiving, and Black Friday, compared to $211.7 billion recorded in 2022.
Consumer ETFs to Buy
Against this backdrop, below we highlight a few consumer ETFs that could be intriguing picks right now.
The underlying Consumer Discretionary Select Sector Index seeks to provide an effective representation of the consumer discretionary sector of the S&P 500 Index. The fund charges 10 bps in fees. Amazon.Com (22.87%), Tesla (20.32%) and McDonalds (4.24%) hold the top three spots in the fund.
No stock accounts for more than 1.71% of the fund. Murphy USA (1.71%), Foot Locker (1.71%) and Abercrombie & Fitch (1.68%) hold the top three spots in the fund. The fund charges 35 bps in fees and yields 2.11% annually.
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. The fund charges 35 bps in fees and yields 1.13% annually. Amazon (21.06%), Home Depot (9.41%) and Walmart (8.54%) hold the top three spots in the fund.
The underlying FactSet On-Demand Index consists of companies which provide on-demand platforms and services to consumers. The fund charges 68 bps in fees. Lyft, Just Eat and Nvidia are the top three stocks of the fund.
The underlying MVIS Global Video Gaming and eSports Index intends to track the overall performance of companies involved in video game development, eSports, and related hardware and software. The fund charges 56 bps in fees (read: Gaming ETFs to Buy on Solid Cash Reserves & Merger Potential?).
The underlying S-Network Global Travel Index identifies exchange-traded stocks of companies that are materially engaged in the global travel industry. Airbnb (5.60%), Uber (5.04%) and Booking Holdings (4.83%) are the top three stocks of the fund. The fund charges 65 bps in fees.
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Consumer Spending Boosts U.S. Q3 GDP: ETFs to Buy
The United States witnessed a substantial economic growth in the third quarter of 2023, with the real gross domestic product (GDP) growing at an annual rate of 4.9%, beating the economists’ expectations of 4.7%. Consumer spending was one of the main contributors to the U.S. GDP growth. The GDP increase marked the largest gain since the fourth quarter of 2021.
Consumer spending, as measured by personal consumption expenditures, improved 4% in the quarter after rising just 0.8% in Q2, and was responsible for 2.7 percentage points of the total GDP increase. The consumer was responsible for about 68% of GDP in Q3. Consumer spending was noticed at both goods and services, with the two measures up 4.8% and 3.6%, respectively.
Durable goods orders grew 4.7% in September, way higher than the 0.1% gain in August and the 2% forecast, according to the Commerce Department. Orders for durables, which include appliances, aircraft and electronics marked their biggest gain since July 2020.
Michael Arone, chief investment strategist for U.S. SPDR Business at State Street Global Advisors, said “this report confirmed what we already knew: The consumer went on a shopping spree in the third quarter,” as quoted on CNBC.
Notably, U.S. retail sales grew 0.7% sequentially in September 2023, following an upwardly revised 0.8% rise in August and beating forecasts of a 0.3% advance. The retail sales data pointed to robust consumer spending despite high prices and borrowing costs.
Holiday Season Shopping Makes Consumer ETFs a Buy
A report from Adobe Analytics shows that online sales during the holiday season are projected to jump 4.8% year over year. Also, sales are anticipated to grow at a faster pace and hit $221.8 billion between Nov 1 and Dec 31, which includes key shopping days like Cyber Monday, Thanksgiving, and Black Friday, compared to $211.7 billion recorded in 2022.
Consumer ETFs to Buy
Against this backdrop, below we highlight a few consumer ETFs that could be intriguing picks right now.
Consumer Discretionary Select Sector SPDR ETF (XLY - Free Report) – Zacks Rank #1 (Strong Buy)
The underlying Consumer Discretionary Select Sector Index seeks to provide an effective representation of the consumer discretionary sector of the S&P 500 Index. The fund charges 10 bps in fees. Amazon.Com (22.87%), Tesla (20.32%) and McDonalds (4.24%) hold the top three spots in the fund.
SPDR S&P Retail ETF (XRT - Free Report) – Zacks Rank #2 (Buy)
No stock accounts for more than 1.71% of the fund. Murphy USA (1.71%), Foot Locker (1.71%) and Abercrombie & Fitch (1.68%) hold the top three spots in the fund. The fund charges 35 bps in fees and yields 2.11% annually.
VanEck Retail ETF (RTH - Free Report) – Zacks Rank #3 (Hold)
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. The fund charges 35 bps in fees and yields 1.13% annually. Amazon (21.06%), Home Depot (9.41%) and Walmart (8.54%) hold the top three spots in the fund.
ProShares On-Demand ETF (OND - Free Report)
The underlying FactSet On-Demand Index consists of companies which provide on-demand platforms and services to consumers. The fund charges 68 bps in fees. Lyft, Just Eat and Nvidia are the top three stocks of the fund.
VanEck Video Gaming and eSports ETF (ESPO - Free Report)
The underlying MVIS Global Video Gaming and eSports Index intends to track the overall performance of companies involved in video game development, eSports, and related hardware and software. The fund charges 56 bps in fees (read: Gaming ETFs to Buy on Solid Cash Reserves & Merger Potential?).
ALPS Global Travel Beneficiaries ETF (JRNY - Free Report)
The underlying S-Network Global Travel Index identifies exchange-traded stocks of companies that are materially engaged in the global travel industry. Airbnb (5.60%), Uber (5.04%) and Booking Holdings (4.83%) are the top three stocks of the fund. The fund charges 65 bps in fees.