For investors seeking momentum, First Trust Nasdaq Retail ETF (FTXD - Free Report) is probably on radar. The fund just hit a 52-week high, and is up roughly 27.3% from its 52-week low price of $19.48/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:
FTXD in Focus
The fund provides exposure to U.S. companies within the retail industry and follows the Nasdaq US Smart Retail Index. It has key holdings in specialty retail, multiline retail, and food & staples retailing. The ETF charges 60 bps in annual fees (see: all the Consumer Discretionary ETFs here).
Why the Move?
The retail corner of the broad consumer discretionary sector has been an area to watch lately given the fervor surrounding the holiday season. The National Retail Federation forecasts holiday retail sales in November and December — excluding automobiles, gasoline and restaurants — will grow 4.3-4.8% year over year to $717.45-$720.89 billion. This is also up from an average annual increase of 3.9% over the past five years. According to eMarketer, Americans are expected to spend $1.002 trillion from Nov 1 to Dec 31, up 5.8% from last year and the highest since 2011. Low unemployment, strong income growth, and high consumer confidence will result in higher spending.
More Gains Ahead?
Currently, FTXD has a Zacks ETF Rank #3 (Hold). Therefore, it is hard to get a handle on its future returns one way or the other. However, 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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