US retail ETFs deliver solid Black Friday gains

investing.com:

By Bansari Mayur Kamdar and Suzanne McGee

(Reuters) — Exchange-traded funds (ETFs) tracking U.S. retailers moved higher in shortened trading hours on Black Friday, outpacing broader market indexes.

While the S&P 500 index ended little changed, the Amplify Online Retail ETF climbed 0.4% and the broader SPDR S&P Retail (NYSE:XRT) ETF gained about 0.7%. Both continued to rise in after-hours trading.

Retailers and analysts have warned of a lackluster outlook for this year's holiday shopping season.

While the National Retail Federation, an organization representing large retailers, expects overall U.S. holiday to hit a new record of about $967 billion in 2023, that 3% to 4% gain from 2022 would still be smallest since 2019.

Retailers like Gap, Walmart (NYSE:WMT) and Best Buy (NYSE:BBY) have voiced caution about the outlook for the holidays and beyond.

«I believe that some forecasts have been distorted by the recently ended United Auto Workers and Hollywood SAG-AFTRA actor strikes, which caused a pullback in spending amongst various large pockets across the country,» said Michael Ashley Schulman, chief investment officer at Running Point Capital.

The SPDR S&P Retail ETF, which has net assets of $396.6 million, recorded weekly outflows of $115.6 in the week ended on Wednesday, according to data from Lipper. That was the largest drop in a month.

Still, the bulk of 2023 returns for investors in U.S. retail ETFs have come in recent weeks. The SPDR fund is up 4.98% since Sept. 30, but only 5.69% throughout 2023. The VanEck Retail ETF has generated half of its 12.8% year-to-date gains in the last two months.

ETF investors «have been alarmed by retailers warning of cautionary, weak, or uneven consumer demand,» Schulman added.