For investors seeking momentum, SPDR S&P Retail ETF (XRT - Free Report) is probably on radar now. The fund just hit a 52-week high and is up more than 23% from its 52-week low price of $37.80/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:
XRT in Focus
This ETF focuses on the retail corner of the broad consumer space in the U.S. market. It has a definite tilt toward small-cap stocks with key holdings in apparel retail, specialty stores, automotive retail and Internet retail. It charges investors 35 basis points a year in fees and has a spread out exposure across various components (see: all the Consumer Discretionary ETFs here).
Why the Move?
The retail sector has been an area to watch lately given the holiday optimism fueled by strong consumer spending, low inflation, rising wages and solid job growth. According to data compiled by National Retail Federation (NRF), holiday sales – online and in stores – are expected to grow 3.6% for November and December to $655.8 billion. This is higher than the average growth of 2.5% over the past one decade and average of 3.4% over seven years since the recovery began in 2009.
More Gains Ahead?
Last week, XRT was upgraded to a Zacks ETF Rank of 1 or ‘Strong Buy’ rating from a Zacks ETF Rank of 3 or ‘Hold’ rating, suggesting that the outperformance could continue in the months ahead. Further, many of the segments that make up this ETF have a strong Zacks Industry Rank, so there is definitely some promise for those who want to ride this surging ETF a little further.
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