The One Retail ETF That Isn't Disappointing

With Black Friday just a few days away, consumers do not need anymore reminders that the 2015 holiday shopping season has officially arrived. Likewise, investors do not need anymore reminders that analysts expect this will be a rough holiday season for retail stocks.

Recent performances by retail exchange traded funds reflect as much. The SPDR S&P Retail ETF XRT, the largest retail ETF, is off 1.5 percent over the past month. That makes the nearly 1.8 percent gained by the Market Vectors Retail ETF RTH over the same period seem almost stellar. With those performances in mind, it could be seen as surprising that of the four ETFs that have hit all-time highs to this point in Monday's session, one is a retail ETF.

That honor goes to the Direxion Daily Retail Bull 3X Shares RETL, which has surged more than 14 percent over the past month. RETL, which is five and a half years old, attempts to deliver three times the daily performance of the Russell 1000 Retail Index.

“The Russell 1000 Retail Index is an index comprised of companies that sell to consumers those discretionary products supplied by manufacturers. These companies include specialty retailers as well as diversified retailers such as department stores, discount stores, and superstores,” according to Direxion. 

That benchmark is home to 55 companies, though the index's top 10 holdings command most of its weight. Familiar names feature in the Russell 1000 Retail Index's top 10 roster include Amazon.com Inc. AMZN, Dow components Home Depot Inc. HD and Wal-Mart Stores Inc. WMT and Costco Wholesale Corp. COST. In fact, the Russell 1000 Retail Index's weight to Amazon is over 10 percent, making RETL one of the ETF's with the largest weights to the high-flying e-commerce giant's shares. 

In fact, Internet retailers account for nearly 23 percent of RETL's weight with 20.7 percent allocated to home improvement retailers.

Despite all the negative headlines recently surrounding the retail space, traders have been warming to RETL. For the five-day period ended Nov. 19, RETL's volume was more than 42 percent above its trailing 20-day average, according to Direxion data. Just six of Direxion's other leveraged ETFs experienced greater increases in volume over that period. To this point in Monday's session, RETL's volume is already 74 percent above the trailing three-month average.

Year-to-date, RETL is up an impressive 44 percent.