Retail-focused ETFs have gained millions of assets thanks to the holiday season and Black Friday sales.
Now could be a good time to invest in the sector as Goldman Sachs anticipates at least a third of annual retail sales take place in the final three months of the year.
ETFs tracking developed retail stocks gathered €151 million ($178 million) since the start of November, a welcome reprieve for flows after an outpouring of more than $212 million over the last year.
FactSet data found that the SPDR S&P Retail ETF (XRT) drew in almost $100 million over the past week, making up almost one third of its year-to-date inflows.
This fund is the largest in the retail sector with more than $550 million under management. XRT is up 2.4% over the last month, benefiting from the recent surge in sales, but has slipped 9.5% over the last year.
Large inflows over the past seven days have pushed XRT into the top 20 equity ETFs in terms of assets gathered, and it has also become one of the five most popular sector ETFs.
The figures come as Black Friday online sales hit $5.03 billion last week, a new record and up almost 17% from 2016. In contrast, offline shopping slumped over the same period and was down 1.6% on last year, Adobe found.
However, there could be good news for retailers as the National Retail Federation predicts a year-over-year rise in holiday sales of as much as 4%, mostly online.
Retail ETFs – IBUY and RTH
IBUY focuses on retailers that generate most revenue via online sales, and it saw inflows of almost $2 million in the past week. The fund has risen a whopping 40% this year, while the broader sector has slipped year to date. IBUY has grown by $120 million since 1 January, as investors have been attracted to its relative outperformance.
RTH enjoyed inflows of $4.3 million over the past week. It costs 0.35% in annual fees.