Analyst Blogs
2012 Retail ETF Landscape
December 16, 2011
Three funds cover the retail sector. But only two of them will ring in the new year in their current form.
There’s the big and very liquid SPDR S&P Retail (NYSEArca: XRT) and the quasi-active PowerShares Dynamic Retail Portfolio (NYSEArca: PMR).
The third fund, the Retail HOLDRS (NYSEArca: RTH), will morph into something new on Dec. 21. Van Eck is taking over the fund and will turn it into the Market Vectors Retail ETF. The ticker will remain the same.
While the new fund hasn’t launched yet, we can still get a sense of how it will stack up to the other two retail sector ETFs.
2012’s New Flavor: Vanilla
The big news is that the sector will finally have a plain-vanilla fund: a market-cap-weighted ETF. When it’s up and running, the new RTH will screen for firms that get their majority of revenue from retail, then select and weight the top 25 of them by market value of equity. The new RTH will pull from a broad universe of stocks from a market-cap point of view, but given its small basket, I’m guessing small-cap exposure will be tiny.
The top 10 holdings for each fund provide a snapshot on exposure and concentrations. I’m using the underlying index for the new RTH as a proxy for its holdings.
The new RTH looks to be the most concentrated, with about 65 percent of its weight in these top 10 stocks. In this respect, the new RTH tips its hat to its HOLDRS origins. The old HOLDRS RTH was even more concentrated.
A cap-weighted fund doesn’t sound like a big deal until you look at the other two retail sector funds. XRT is equal weighted, and PMR uses PowerShares’ Intellidex stock-picking methodology. XRT and PMR both lean heavily to small-caps in stark contrast to the new RTH.
  Previous Page | 1 | 2 | | Full Article |Next Page  |
Looking Beyond VWO And EEM
Broad-based, cap-weighted ETFs were the way to play emerging markets over the past decade. But it’s time for investors to become more strategic and look beyond VWO and EEM.
Why Class Matters More Than Ever
Equity indices are based on common shares. But there's little equitable about the way an increasing number of companies treat shareholders.
Choose The Right Payout ETF
With the equity market plunging this month and interest rates so low, it’s no wonder investors are piling into dividend ETFs to supplement their incomes.
Hothouse ETFs: Homebuilders
Homebuilder ETFs have outperformed the broad market by double digits year-to-date, which merits a closer look.
Facebook's Effect On Tech ETFs
Facebook’s IPO is the news of the day. What does it mean for ETF investors?
SSgA 12b-1 Tempest In Teapot
Rick Ferri got the world of ETFs all worked up this week about possible 12b-1 fees. Luckily, it looks like he sounded a false alarm.
Global REIT ETF Revolution?
My colleague Devin Riley recently lamented the lack of focused global real estate ETFs. That may be about to change.Has GASZ Run Out Of Gas?
UBS sent out a press release recently extolling the virtues of its ETN that’s designed to profit from contango in natural gas markets. I had to investigate.ETFs And A Calif. Muni Storm
California’s massive deficit problem may have caught politicians by surprise, but ETF investors needn’t be caught so flat-footed.Merk’s OUNZ Opens New Door
The Merk Gold Trust, a bullion ETF currently in registration, is setting out to change part of the way ETFs work.
