Retail Showdown

12/05/2013 9:00 am EST

Focus: ETFs

Ron Rowland

Editor, All Star Fund Trader


Retailing is big business. Although the retailing industry is not one of the ten major economic sectors of the Global Industry Classification Standard, it does play a major role within the Consumer Discretionary sector, explains Ron Rowland, editor of All Star Investor.

Additionally, there are at least five funds dedicated to this industry. However, these funds posted wildly varying returns last week, indicating a lack of correlation among the underlying companies.

Said another way, investors are betting there will be winners and losers in 2013's end-of-year retailing showdown.

The five funds consist of three ETFs and two traditional mutual funds. The names and gains of the three ETFs were PowerShares Dynamic Retailing ETF (PMR) 0.6%, Market Vectors Retail ETF (RTH) 0.7%, and SPDR S&P Retail ETF (XRT) 1.1%.

Meanwhile, the two mutual funds did better, with Rydex Retailing (US:RYRIX) gaining 1.2% and Fidelity Select Retailing (US:FSRPX) up 1.7%.

Fidelity Select Retailing is the only actively managed fund in this mix and was the clear winner, making this a week when active management showed its strength.

FSRPX is also showing superior results for the past six months. Early retail analysts' reports indicate the multi-year shift from brick-and-mortar stores to online shopping continues unabated this year.

Active managers can tilt a fund's holdings to exploit this trend, while passively managed funds are held captive to their indexing methodology.

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