Best ETFs & Stocks From November's Top Sector

It’s the merriest month of the year for the retail sector, courtesy of the holiday fervor and encouraging industry fundamentals. The frenzy of heavy discounts, promotions and free shipping are driving strong sales. Notably, the holiday season contributes about 25-40% to the sector’s annual sales.

Per the latest data from National Retail Federation (NRF), more than 174 million Americans shopped during the Thanksgiving weekend (from Thanksgiving through Cyber Monday), much higher than the pre-holiday prediction of 164 million consumers. The group expects holiday sales through November and December to rise as much as 4% this year to $682 billion (read: 4 Strong Reasons to Buy Retail ETFs Ahead of Black Friday).

The rise came on the back of economic growth, higher consumer confidence and low unemployment. The economy is expanding at the fastest clip in three years with best back-to-back quarters of at least 3% GDP growth. Unemployment dropped to the lowest level since December 2000 to 4.1%. Further, consumer confidence scaled the highest level in 17 years.

Moreover, the deluge of better-than-expected earnings reports from retailers as well as their solid full-year outlook added to the strength.

Given this, investors might want to tap the space with the top-performing retail ETFs and stocks of this month. We have highlighted four funds and stocks that are poised to perform well in the final month of the year.

Best ETFs

SPDR S&P Retail (MX:XRT) ETF XRT

This product tracks the S&P Retail Select Industry Index, holding 87 securities in its basket with none accounting for more than 1.7%. The fund has amassed $534 million in its asset base and charges 35 bps in annual fees. Volume is extremely solid, exchanging nearly 4.3 million shares in hand a day on average. The fund has gained nearly 11.3% in November and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.

VanEck Vectors Retail ETF (V:RTH)

This fund provides exposure to the 26 largest retail firms by tracking the MVIS US Listed Retail 25 Index. It is highly concentrated on the top firm, Amazon (NASDAQ:AMZN), at 18.6% while other firms hold no more than 7.6% share. The product has amassed $58.7 million in its asset base and trades in light average daily volume of 12,000 shares. It charges 35 bps in annual fees and has gained 8.6% this month. RTH has a Zacks ETF Rank #3 with a Medium risk outlook (read: New ProShares Retail ETFs to Bet on Store to Online Shift).

PowerShares Dynamic Retail Portfolio (V:PMR)

This fund follows the Dynamic Retail Intellidex Index. In total, the product holds 34 securities, with each holding no more than 5.1% of assets. The fund has accumulated just $17.8 million in its asset base and charges 63 bps in fees per year. Average daily volume is paltry at 2,000 shares. The ETF was up 8.2% this month and carries a Zacks ETF Rank #2 (Buy), with a Medium risk outlook.

First Trust Nasdaq Retail ETF FTXD

The fund follows the Nasdaq US Smart Retail Index and holds 48 stocks in its basket. It is moderately concentrated across components, with each firm holding less than 9.1% of assets. FTXD has accumulated $1 million in its asset base and has an expense ratio of 0.60%. It trades in meager volume of under 1,000 shares and added 7.6% this month. The fund has a Zacks ETF Rank #3.

Best Stocks

We have highlighted the best-performing retail stocks that currently have a Zacks Rank #1 (Strong Buy) or 2.

Boot Barn Holdings Inc. (NYSE:BOOT)

Based in Irvine, CA, Boot Barn operates as a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories. It has a Zacks Rank #2 and belongs to a Zacks Industry Rank in the top 40%. With a market cap of $357.6 million, the stock has seen positive earnings estimate revision of 4 cents for this year over the past 30 days. It has returned 76.2% in November.

Hibbett Sports, Inc. (NASDAQ:HIBB)

Based in Birmingham, AL, Hibbett Sports operates sporting goods stores in small and mid-sized markets, predominantly in the South, Southwest, Mid-Atlantic and Midwest. With a market cap of $367.7 million, the stock has seen solid earnings estimate revision of 8 cents this month for this fiscal. It sports a Zacks Rank #1 and belongs to a Zacks Industry Rank in the top 33%. HIBB is up 54.7% this month. You can see the complete list of today’s Zacks #1 Rank stocks here.

Sprouts Farmers Market Inc. (NASDAQ:SFM)

Based in Phoenix, AZ, Sprouts Farmers is engaged in the retailing of natural and organic food primarily in the United States. It has seen solid earnings estimate revision of 6 cents this month for this year and has a Zacks Rank #1. The stock belongs to a strong Zacks Industry Rank in the top 16%. It has $2.9 billion in market capitalization and has surged 24.8% this month (read: Retail ETFs Sizzling on Black Friday Deals).

Ross Stores Inc. (NASDAQ:ROST)

Based in Dublin, CA, Ross Stores operates off-price retail apparel and home fashion stores under the Ross Dress for Less and dds DISCOUNTS brand names in the United States. With a market cap of $27.5 billion, the company has seen positive earnings estimate revision of 6 cents this month for this year. It has gained 19.6% and has a Zacks Rank #2. Ross Stores belongs to a Zacks Industry Rank in the top 29%.

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VANECK-RETAIL (RTH): ETF Research Reports

SPDR-SP RET ETF (XRT): ETF Research Reports

FT-NDQ RETAIL (FTXD): ETF Research Reports

PWRSH-DYN RETL (PMR): ETF Research Reports

Sprouts Farmers Market, Inc. (SFM): Free Stock Analysis Report

Ross Stores, Inc. (ROST): Free Stock Analysis Report

Hibbett Sports, Inc. (HIBB): Free Stock Analysis Report

Boot Barn Holdings, Inc. (BOOT): Free Stock Analysis Report

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