Morningstar Rating

ETF Research and Analysis

by Robert Goldsborough
Suitability
SPDR S&P Retail ETF XRT offers exposure to the United States retail sector, which in turn gives investors exposure to consumer spending. This exchange-traded fund holds U.S. companies that own and operate big-box general   Read more 

Bull Case

This fund is a low-cost retail-focused ETF. Its 0.35% expense ratio is also markedly lower than comparable mutual funds.
Cyclical stocks tend to rally several months in advance of economic recovery. This ETF typically rides such market rebounds.
This fund's equal-weighting methodology translates into more-diverse exposure to the retail industry. Read more 

Bear Case

The ebbs and flows of consumer spending will affect this ETF.
Aside from being heavily dependent on disposable household income and consumer spending, the firms in this portfolio are also susceptible to changes in demographics and fickle consumer tastes.
If the economy were to head into a recession, many of the companies in this ETF would suffer. Read more 

Why Index Construction Matters for ETF Investors 
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