ETFs Poised to Capitalize on Year End Sales (PMR, WMT, M, RTH, XRT)

With the back to school shopping saga underway and the holiday season around the corner, retailers are preparing for their most important time of the year  Capitalizing on potentially strong end of the year for retailers is something that every investor should take advantage of. With that being said, there are a number of ETF’s that can help boost your portfolio and give it one last push before the end of the year.

Highlighted below are three retail ETFs whose holdings could be positively affected by the rise in consumer spending over the next five months.

The PowerShares Dynamic Retail Portfolio ETF PMR has a portfolio of 29 retailers almost exactly split between consumer discretionary and consumer staples.The top four holdings in the ETF are Kroger Co KR at 5.4 percent, Costco Wholesale Group COST 5.4 percent, O’Reilly Automotive Inc ORLY 5.4 percent, and Macy’s Inc M 5.2 percent.

The remaining holdings are well distributed ranging from 5.2 percent to 2.1 percent of the fund. Over the last two years PMR is up nearly 35 percent, but is slightly lagging the S&P 500 this year with a gain of 6 percent. One concern is that PMR boasts an expense ratio of 0.63 percent almost double that of its competitors.

The SPDR S&P Retail ETF XRT is the most diverse ETF of the three mentioned with 103 different holdings and the top ten stocks make up less than 12 percent of the entire portfolio. The top three holdings include SUPERVALUE INC. SVU, Family Dollar Stores FDO, and PetSmart Inc. PETM, each making up 1.2 percent of the allocation.

XRT has outperformed PMR with a gain of just under a 45 percent over the last two years and is up 11 percent year-to-date. PMR has an expense ratio of 0.35 percent and is a solid option for anyone looking for a diverse fund that will efficiently reflect the overall performance of the retail sector

The Market Vectors Retail ETF RTH is a slightly less diverse fund than the previous two. With its top two holdings Wal-Mart Stores Inc. WMT and Amazon.com Inc. AMZN making up just under 20 percent of the total portfolio. Its success is largely dependent on the success of the top two holdings. Despite its more concentrated holdings, RTH has performed the best out of the three ETFs this year with a gain of 17 percent.; over the last two years RTH is up 40 percent. RTH also has an expense ratio of 0.35 percent

All three retail ETFs are all solid options for investors looking to take advantage of a boost in retails over last year. Many experts are looking for holiday says to beat the 3 percent gains the sector experienced the last two years. The pent up demand of the weary consumers could be exactly what the retailers are asking from Santa this holiday season.