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How to Play Back-to-School Season With ETFs & Stocks

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Back-to-school and college is one of the busiest shopping seasons (mid-July to mid-September) in the United States. As of early July,about 67% of back-to-school and college shoppers have already started buying items for the upcoming school year, according to the National Retail Federation (NRF).

This marks an increase from 55% last year and represents the highest level since NRF began tracking early shopping in 2018, the NRF article indicated. Half of families fear rising prices from tariffs, and that’s why they started shopping earlier, per the above-mentioned NRF article.

Where Will Shopping Spent Go?

For college students and parents, the popular back-to-school shopping destinations are online (48%), discount stores (36%), department stores (35%) and college bookstores (27%). K-12 shoppers have a budget of $295.81 on average for electronics ($13.5 billion total), $249.36 for clothing and accessories ($11.4 billion total), $143.77 for school supplies ($6.6 billion total), and $169.13 for shoes ($7.8 billion total), according to the above-mentioned NRF article.

The top five categories for college spending include $309.50 on average for electronics ($20.7 billion total), $191.39 for dorm or apartment furnishings ($12.28 billion total), $166.07 on clothing and accessories ($11.1 billion total), $140.24 on food ($9.4 billion total) and $117.95 on shoes ($7.9 billion total), according to the above-mentioned NRF article.

Stocks to Play

Costco Wholesale (COST - Free Report)

Costco Wholesale Corporation sells high volumes of food and general merchandise (including household products and appliances) at discounted prices through membership warehouses. The Zacks Rank #3 (Hold) stock comes from the Retail - Discount Stores industry. The stock has a good VGM Score of B.

Lowe's Companies (LOW - Free Report)

Zacks Rank #3 Lowe’s has evolved as one of the world’s leading home improvement retailers, offering services to homeowners, renters and commercial business customers. Lowe’s has all the essentials for going back to campus and making one feel at home. The stock has an upbeat VGM Score of A.

Ambarella (AMBA - Free Report)

Ambarella Inc. develops video compression and image processing semiconductors, which enable high-definition or HD video capture, sharing and display. The Zacks Rank #3 company hails from the Electronics – Semiconductors industry.

Amazon.com (AMZN - Free Report)

Amazon.com is one of the largest e-commerce providers, with sprawling operations in North America, now spreading across the globe. The Zacks Rank #3 company hails from the Internet - Commerce industry.

ETFs to Buy

ProShares Online Retail ETF (ONLN - Free Report)

Online shopping is one of the most-favored forms of shopping now. The underlying ProShares Online Retail Index is a specialized retail index that tracks retailers principally selling online or through other non-store channels. The fund charges 58 bps in fees and yields 0.65% annually.

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, online, 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 0.70% annually.

Invesco Food & Beverage ETF (PBJ - Free Report)

As collegegoers are likely to spend on food, this ETF has a chance of going up. The underlying Dynamic Food & Beverage Intellidex Index comprises stocks of 30 U.S. food and beverage companies. These are companies primarily 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 62 bps in fees and yields 1.68% annually.

VanEck Semiconductor ETF (SMH - Free Report)

As electronics sales are on the rise on occasions like this, one should note that the pillar of electronics, i.e., semiconductors, is expected to see higher demand. 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 and yields 0.37% annually.

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