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Leveraged Retail ETF Gets Some Love, Too

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Leveraged Retail ETF Gets Some Love, Too
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With the holiday shopping season here, perhaps it's not surprising that retail stocks and the related exchange-traded funds are spending more time in the limelight. Even the previously moribund SPDR S&P Retail ETF (NYSE: XRT) is up 5 percent over the past week and about 11 percent over the past month.

XRT is still saddled with a year-to-date loss, underscoring previous weakness in shares of brick-and-mortar retailers, but data confirm investors are renewing their enthusiasm for the ETF.

“About $320 million has been poured into the SPDR S&P Retail ETF over the past two days, the most since Jan. 17,” reports Bloomberg.

The renewed retail enthusiasm isn't confined to XRT. Aggressive have been pushing into XRT's leveraged equivalent, the Direxion Daily Retail Bull 3X Shares (NYSE: RETL) in a big way in recent weeks.

What RETL Does

RETL attempts to deliver triple the daily returns of the equal-weight S&P Retail Select Industry Index, the same index XRT follows.

That index allocates nearly 58 percent of its weight to specialty retailers and 17.1 percent to Internet retailers, according to Direxion data. Multi-line and food and staples retailers comprise the rest of the benchmark. No stock represents more than 1.5 percent of the index's weight.

RETL is designed to be a short-term, intraday instrument. As is the case with other leveraged ETFs, RETL can't be expected to deliver triple the returns of the underlying benchmark beyond a single trading day.

Shopping With RETL

Just as investors are pushing into XRT, traders are doing the same with RETL. For the five days ended Nov. 29, RETL's volume was 105.3 percent above the trailing 20-day average, according to issuer data. That marked the biggest increase among all Direxion leveraged ETFs during that period.

Over the past month, RETL has averaged daily inflows of nearly $438,000, also good for one of the best totals among Direxion's leveraged bullish ETFs.

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