Investors looking to take advantage of the positive impact of the holiday season on retailers should consider looking to top-ranked ETFs in the space.
As consumer spending is the key to the viability of any economy, the health of the retail industry is an important economic indicator. According to the National Retail Federation, retail spending accounts for about $2.5 trillion of annual U.S. GDP and acts as a barometer for measuring the health of the nation’s economy.
The Conference Board’s reading of the Consumer Confidence Index — a yardstick of U.S. consumer health — continues to post solid figures, while the unemployment rate is also trending lower. Thanks to these factors, many are starting to feel more confident about their economic condition and are considering spending once more.
With improving unemployment rates, increasing home prices and rising consumer confidence, this holiday season is expected to be good for retailers. The National Retail Federation expects holiday sales this year to rise 4.1% to $586.1 billion, above the 10-year average holiday sales increase of 3.5%, but still lower than the 5.6% growth recorded in the 2011 holiday season.
Optimism for the holiday season remains intact as retail promotions are expected to hit the right chord with holiday shoppers. Retailers have gone to great lengths to make the most of the busiest shopping time of the year, offering lucrative discounts to flexibility of shopping through smartphones and tablets, to free shipping and 24-hour shopping.
The latest trend this holiday season is the policy of matching prices being offered by online retail giants in order to keep up with the competition. Further, to better serve the shoppers, the retailers are ramping up their hiring plans as well, suggesting a pretty optimistic tone overall.
Investors willing to invest in this space of the market, and take advantage of the positive impact of the upcoming holiday season on retailers, should consider looking to top ranked ETFs in the space.
According to the Zacks ETF Rank, the PowerShares Dynamic Portfolio (PMR) is best.
The information supplied above by Zacks Investment Research Inc. contains opinions based on factual research which may or may not be accurate. Neither Zacks nor Intellisphere will assume any liability for losses from investment decisions based on this information.