Keeping in mind the company’s conservative outlook for the rest of the year, investors may want to participate in Wal-Mart’s momentum using an ETF with a significant position in the retail giant.
Three of the top Wal-Mart ETFs include State Street’s Consumer Staples Select Sector SPDR Fund (Amex: XLP), PowerShares’ FTSE RAFI Consumer Services Sector Portfolio (Nasdaq: PRFS) and iShares’ Dow Jones U.S. Consumer Services Sector Index Fund (NYSEArca: IYC).
State Street’s $2.5 billion XLP has 10.8% of assets invested in Wal-Mart and tracks an index of 40 stocks in the consumer discretionary sector of the S&P 500® Index including companies from industries such as food and staples retailing, beverages, food products, tobacco, household products and personal products.
PowerShares’s $4.5 million PRFS tracks a fundamentally weighted index of the largest U.S. consumer services stocks with Wal-Mart as the largest position at 10.8% of assets. The index and fund are rebalanced annually.
iShares’s $200 million IYC also has Wal-Mart as its largest holding at 9.2% of assets. The fund tracks a market-cap weighted index of 226 companies including food and drug retailers, general retailers, media and travel and leisure firms.
XLP has outperformed its peers over the past 12 months helped by the fact that it has more exposure to consumer goods manufacturers and less emphasis on retailers than does PRFS and IYC.
Also, see our previous post on Wal-Mart suppliers.