Five ETFs For Black Friday
Published on Tuesday, 22 November 2011 00:14 Written by ETF Professor
Everyone knows that this Friday is more special than a typical Friday. It's the time of year when basically every retailer under the sun makes its bones.
Operate in the retail space and fail to produce some momentum over the next two weeks, and investors will have their say (not in a good way).
Last week, we looked at five stocks that might be poised for bigger things this Black Friday. Earlier today, we examined five stocks to avoid as consumers shake out of their turkey naps and head to the malls. Now, it's time to take a look at Black Friday ETFs.
Can't make up your mind about one retail stock or just don't want to engage in retail stock-picking? Then consider the following ETFs.
SPDR S&P Retail ETF (NYSE: XRT): On a technical basis, things were actually looking pretty good for the SPDR S&P Retail ETF until late last week. If the ETF can honor support at $50 and the holiday shopping season is a boon for retailers, then there's potential upside of 10% here. Over 30% of XRT's weight lies in apparel retailers such as Aeropostale (NYSE: ARO) and American Eagle (NYSE: AEO), so those names and related fare will figure heavily in XT's near-term performance.
Consumer Discretionary Select Sector SPDR (NYSE: XLY): If forced to pick which one we're more worried about between XLY and XRT, it would easily be XLY. The ETF has given up all its critical moving averages and taken out support at $37.50. Amazon (NASDAQ: AMZN), Home Depot (NYSE: HD), Target (NYSE: TGT) and Nike (NYSE: NKE) account for about 17% of XLY's weight. So yeah, this is the time of year when XLY will either get going or falter mightily.
Vanguard Consumer Discretionary ETF (NYSE: VCR): The Vanguard Consumer Discretionary ETF is barely different than XLY. The top-10 holdings are basically a mirror image of each other and unfortunately for both ETFs, the charts look similar as well. If you're picking between the two it is worth noting that in this case, the Vanguard offering is not the cheaper option. VCR has an expense ratio of 0.24%. XLY's is 0.2%.
PowerShares Dynamic Retail ETF (NYSE: PMR): Home to 30 stocks and an expense ratio of 0.63%, here's why you need to watch the PowerShares Dynamic Retail ETF this holiday season. Macy's (NYSE: M), Limited (NYSE: LTD), Coach (NYSE: COH), TJX Cos. (NYSE: TJX) and Costco (Nasdaq: COST) combine for about 25% of the ETF's weight. Unfortunately, this chart looks a lot like what we see with VCR and XLY.
PowerShares QQQ (NASDAQ: QQQ): Tech has been battered lately, but the PowerShares QQQ isn't just a tech ETF. Not when Amazon, Apple (NASDAQ: AAPL) and eBay (NASDAQ: EBAY) account for over 19% of this ETF's weight. From $59 to around $54 in a matter of days, QQQ might have the most vulnerable chart of this group. On the other hand, Apple and Amazon represent the new age of Black Friday plays, so QQQ belongs on this list.