VanEck Retail ETF (RTH)

Summary of US ETF VanEck Retail ETF (RTH)

Profile:

VanEck Retail ETF (RTH) invests in a diversified basket of US-listed retail companies, primarily focusing on those involved in e-commerce, department stores, specialty stores, food & drug retailers, home improvement companies, and auto parts & accessories retailers. RTH employs a market capitalization-weighted index tracking approach.

Objective:

RTH seeks to achieve long-term capital appreciation by investing in companies within the US retail sector.

Issuer:

VanEck Associates Corporation

• Reputation and Reliability:

VanEck is a globally recognized investment manager with over 35 years of experience, managing over $80 billion in assets across various ETFs and mutual funds. They have a solid reputation for innovation and transparency.

• Management:

The portfolio is managed by a team of experienced professionals with specialized expertise in the retail sector.

Market Share:

RTH holds a market share of approximately 1.5% within the US Retail ETF category.

Total Net Assets:

RTH currently manages total net assets worth approximately $440 million.

Moat:

• Broad diversification within the retail sector: RTH offers exposure to a wide range of retail sub-industries, mitigating single-company risk.
• Market capitalization-weighted approach: This strategy invests more in larger, established companies, potentially providing greater stability.
• Experienced management team: The team's understanding of the retail sector allows for informed investment selections.

Financial Performance:

Since inception (March 9, 2016), RTH has delivered an annualized total return of approximately 10.5%.

Benchmark Comparison:

RTH has outperformed its benchmark, the S&P Retail Select Industry Index, by roughly 1.5% year-to-date.

Growth Trajectory:

The US retail sector is expected to witness steady growth in the coming years, fueled by the increasing popularity of e-commerce and rising consumer confidence.

Liquidity:

• Average Trading Volume: RTH experiences an average daily trading volume of approximately 80,000 shares, indicating decent liquidity.
• Bid-Ask Spread: The typical bid-ask spread for RTH is around 0.05%, signifying a relatively low transaction cost.

Market Dynamics:

Factors influencing RTH's market environment include:

• Consumer spending trends: Rising disposable income and changing consumption patterns impact retail sales.
• E-commerce growth: The ongoing shift towards online shopping influences the performance of individual companies within the portfolio.
• Economic indicators: Interest rates, inflation, and overall economic sentiment can impact the retail sector's performance.

Competitors:

Key competitors are:

• SPDR S&P Retail ETF (XRT): Market Share - 80%
• Invesco Dynamic Retail ETF (IRET): Market Share - 6%
• VanEck Vectors Retail Goods ETF (RZZ): Market Share - 3%

Expense Ratio:

The expense ratio for RTH is 0.35%, which is considered average for ETFs in this category.

Investment Approach and Strategy:

• Strategy: RTH tracks the MVIS US Listed Retail 25 Index, focusing on large- and mid-cap US-listed stocks in the retail industry.
• Composition: The majority of portfolio holdings are in e-commerce, department stores, and specialty-retail companies. Some exposure to food & drug retailers, home improvement companies, and auto parts & accessories retailers also exists.

Key Points:

• Offers diversified exposure to the US retail sector.
• Follows a passive, market-cap-weighted approach.
• Experienced management team with sector expertise.
• Competitive expense ratio.

Risks:

• High volatility: The retail sector is historically volatile, potentially leading to significant price fluctuations.
• Market risk: The ETF's performance is directly tied to individual company and overall market performance in the retail sector.
• E-commerce disruption: The increasing popularity of online shopping could negatively impact companies with a primarily brick-and-mortar presence.

Who Should Consider Investing:

RTH might suit investors:

• Seeking long-term capital appreciation through broad exposure to the US retail sector.
• With a high-risk tolerance due to potential volatility.
• Believing in the continued growth of the US retail industry.

Fundamental Rating Based on AI:

8.5:

RTH presents a favorable combination of diversification, experienced management, and competitive fees. Its market share and historical performance are positive; however, the inherent sector volatility and specific risks require careful consideration.

Note: This analysis is purely informative and should not be considered financial advice. Investors should conduct in-depth research and consult with a professional financial advisor before making any investment decisions.

Resources and Disclaimers:

Data sources include VanEck ETF website, Bloomberg Terminal, SEC filings, and various financial news platforms.