Holiday Spending to Hit $1 Trillion—Time to Buy This Retail ETF?

Core Insights - The consumer discretionary sector has faced challenges in 2025, with a year-to-date gain of only 0.51%, marking it as the second-worst performing sector in the S&P 500, only behind consumer staples which is down 0.90% [3][4] - Holiday spending in the United States is projected to exceed $1 trillion for the first time, with estimates between $1.01 trillion and $1.02 trillion, representing a 3.7% increase from 2024 [4][6] - The VanEck Retail ETF (NASDAQ:RTH) has shown nearly 11% gain in 2025, outperforming the overall consumer discretionary sector, and provides exposure to major retail companies [5][6] Consumer Discretionary Sector Performance - The consumer discretionary sector has struggled due to tariffs, inflation, and a weak U.S. dollar, leading consumers to prioritize essential goods over discretionary spending [2][3] - The trends of underperformance are expected to continue into 2026, although the holiday season may present short-term opportunities for recovery [3][4] Holiday Spending Projections - The National Retail Federation (NRF) forecasts that holiday spending will reach between $1.01 trillion and $1.02 trillion, marking a significant milestone in consumer spending [4][6] - This increase in holiday spending is anticipated to provide a potential boost to the consumer discretionary sector as the year ends [6] Investment Opportunities - The VanEck Retail ETF aims to replicate the performance of the MVIS® US Listed Retail 25 Index, which includes companies involved in various retail sectors [5] - The ETF's top holdings include major companies like Amazon, Walmart, and Costco, which together account for nearly 38% of the fund's portfolio, positioning it well for potential gains during the holiday season [7]