Zoom Stock – Should You Invest in the VanEck Vectors Retail ETF (RTH)?
Designed to provide broad exposure to the Consumer Discretionary – Retail segment of the equity market, the VanEck Vectors Retail ETF (RTH) is a passively managed exchange traded fund launched on 12/20/2011.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Consumer Discretionary – Retail is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 8, placing it in top 50%.
The fund is sponsored by Van Eck. It has amassed assets over $258.02 million, making it one of the average sized ETFs attempting to match the performance of the Consumer Discretionary – Retail segment of the equity market. RTH seeks to match the performance of the MVIS US Listed Retail 25 Index before fees and expenses.
The MVIS US Listed Retail 25 Index tracks the overall performance of companies involved in retail distribution, wholesalers, on-line, direct mail and TV retailers, multi-line retailers, specialty retailers and food and other staples retailers.
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.35%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.59%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund’s holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Consumer Discretionary sector–about 69.70% of the portfolio. Consumer Staples and Healthcare round out the top three.
The top 10 holdings account for about 69.97% of total assets under management.
Performance and Risk
The ETF has added roughly 8.52% and it’s up approximately 30.12% so far this year and in the past one year (as of 06/21/2021), respectively. RTH has traded between $129.24 and $176.44 during this last 52-week period.
The ETF has a beta of 0.94 and standard deviation of 21.05% for the trailing three-year period, making it a medium risk choice in the space. With about 26 holdings, it has more concentrated exposure than peers.
VanEck Vectors Retail ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, RTH is a reasonable option for those seeking exposure to the Consumer Discretionary ETFs area of the market. Investors might also want to consider some other ETF options in the space.
ProShares Online Retail ETF (ONLN) tracks PROSHARES ONLINE RETAIL INDEX and the Amplify Online Retail ETF (IBUY) tracks EQM Online Retail Index. ProShares Online Retail ETF has $1.07 billion in assets, Amplify Online Retail ETF has $1.27 billion. ONLN has an expense ratio of 0.58% and IBUY charges 0.65%.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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VanEck Vectors Retail ETF (RTH): ETF Research Reports
Amazon.com, Inc. (AMZN): Free Stock Analysis Report
Amplify Online Retail ETF (IBUY): ETF Research Reports
ProShares Online Retail ETF (ONLN): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.