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5 ETFs to Ride High on Strong Holiday Retail Sales

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The 2023 holiday shopping season has been strong for retailers, spurred by retail promotions and a rise in online and restaurant spending. According to Mastercard SpendingPulse, U.S. retail sales increased 3.1% between Nov 1 and Dec 24. However, this is lower than the 3.7% growth predicted in September and the 7.6% growth reported last year. Despite early-season promotions, overall spending did not reach projected levels.

Given this, we are presenting five ETFs that are poised to soar on holding shopping sales splurge. These include AdvisorShares Restaurant ETF (EATZ - Free Report) , Invesco S&P SmallCap Consumer Discretionary ETF (PSCD - Free Report) , Amplify Online Retail ETF (IBUY - Free Report) and ProShares Online Retail ETF (ONLN - Free Report) and SPDR S&P Retail ETF (XRT - Free Report) .

Online spending grew faster than in-store sales and more than double the rate of total retail sales. Online sales jumped 6.3% from the year-ago period, while in-store sales rose a modest 2.2% (read: 4 ETF Areas & Stocks to Win on Upbeat November Retail Sales).

Americans spent more on food, with restaurant spending rising the most (7.8% year over year) among the five categories. This was followed by a rise of 2.4% in apparel and 2.1% in groceries. Sales of electronics and jewelry were down 0.4% and 2%, respectively.

Major retailers like Amazon (AMZN - Free Report) and Walmart (WMT - Free Report) significantly increased their promotions in November to attract bargain hunters. These promotions were not as deep as in the previous year when retailers were dealing with excess stock due to the pandemic.

ETFs to Tap

AdvisorShares Restaurant ETF (EATZ - Free Report)

AdvisorShares Restaurant ETF is an actively managed and the only ETF investing exclusively in the restaurant and food service industry, including restaurants, bars, pubs, fast food, take-out facilities, food catering services and more. AdvisorShares Restaurant ETF holds 26 securities in its basket with a modest concentration on the top firms.

AdvisorShares Restaurant ETF gathered $2.8 million in its asset base. EATZ charges 1.01% as annual fees and trades in an average daily volume of 1,000 shares.

Invesco S&P SmallCap Consumer Discretionary ETF (PSCD - Free Report)

Invesco S&P SmallCap Consumer Discretionary ETF targets the small-cap segment of the broad consumer discretionary space by tracking the S&P SmallCap 600 Capped Consumer Discretionary Index. It holds 87 securities in its basket, with specialty retail taking the largest share at 33.1%. Household durables, and hotels, restaurants and leisure account for double-digit exposure each.

Invesco S&P SmallCap Consumer Discretionary ETF has attracted $37.2 million in AUM and charges 30 bps in annual fees. It trades in an average daily volume of about 1,000 shares and has a Zacks ETF Rank #2 (Buy) with a High risk outlook.

Amplify Online Retail ETF (IBUY - Free Report)

Amplify Online Retail ETF offers global exposure to companies that derive 70% or more revenues from online and virtual retail by tracking the EQM Online Retail Index. IBUY holds 72 stocks in its basket, with the largest allocation in online retail at 39% and online marketplace at 38% (read: 5 Sector ETFs That Beat the Market in Q4).

Amplify Online Retail ETF has attracted $193.2 million in its asset base and charges 65 bps in annual fees. IBUY trades in an average daily volume of 26,000 shares.

ProShares Online Retail ETF (ONLN - Free Report)

ProShares Online Retail ETF offers exposure to the companies that principally sell online or through other non-store channels and then zeros in on the companies reshaping the retail space. It tracks the ProShares Online Retail Index, holding 19 stocks in its basket.

ProShares Online Retail ETF has accumulated $108.4 million in its asset base and charges 58 bps in annual fees. ONLN trades in an average daily volume of 19,000 shares.

SPDR S&P Retail ETF (XRT - Free Report)

SPDR S&P Retail ETF tracks the S&P Retail Select Industry Index, which provides exposure across large, mid- and small-cap retail stocks. It holds 77 well-diversified stocks in its basket, with key holdings in apparel retail, automotive retail and specialty retail.

SPDR S&P Retail ETF is the largest and most popular in the retail space, with AUM of $455.2 million and an average trading volume of 8 million shares. It charges 35 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.

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