5 ETFs To Binge On This Thanksgiving Week

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History shows that the holiday-shortened Thanksgiving week is a bullish feast for stock investors, even with low volumes. This is especially due to increased consumer spending, lower dinner cost and upbeat traveling. Per researchers, the S&P 500 Index has gained around 1% on average during the week over the past 30 years, with 75% of the returns coming in positive. The Dow Jones has mirrored this trend.

The current stock market trends also support the bullish Thanksgiving week view. Wall Street has been on a strong rally, with all three major indices posting their third straight winning performance. Easing inflation and continued hopes that the Fed’s aggressive interest rate hiking campaign might be nearing an end are providing a boost to the stocks.

Investors seeking to cash in on big gains could consider ETFs from the areas likely to benefit from the Thanksgiving week. These are Invesco S&P SmallCap Consumer Discretionary ETF (PSCD - Free Report), SPDR S&P Retail ETF (XRT - Free Report), AdvisorShares Restaurant ETF (EATZ - Free Report), AdvisorShares Hotel ETF (BEDZ - Free Report) and ALPS Global Travel Beneficiaries ETF (JRNY - Free Report).


Strong Thanksgiving Spending

Consumer spending is expected to reach $130 billion this Thanksgiving weekend, up 4% year over year, per the latest International Council of Shopping Centers' (ICSC) survey. About 90% of those who plan to shop over the Thanksgiving weekend plan to visit a store either to buy items or pick up an online purchase, and 84% plan to make purchases online. The top way consumers plan to pay is by debit cards (65%), followed by credit cards (49%) and cash (45%). Among the consumers,13% plan to make purchases using buy-now, pay-later options.

According to the National Retail Federation, an estimated 182 million people are planning to shop in-store and online from Thanksgiving Day through Cyber Monday this year. This represents 15.7 million more people than last year and is the highest estimate since NRF began tracking this data in 2017. About 74% of consumers expect to shop in the period beginning Thanksgiving Day and ending on Cyber Monday.

Black Friday continues to be the most popular day to shop, with 72% planning to shop, followed by 39% on Cyber Monday.

Americans are bracing for a cheaper Thanksgiving dinner this year due to lower turkey prices. The average cost of serving 10 people for Thanksgiving is expected to be $61.17, down 4.5% from last year’s record-high average of $64.05, according to the American Farm Bureau Federation's annual Thanksgiving dinner cost survey.


Upbeat Travel

Travel service provider American Automobile Association (AAA) expects 2023 to be the third-busiest Thanksgiving travel season in the United States over the last two decades. About 55.4 million people will travel 50 miles or more from home this Thanksgiving. This is up 2.3% from last year. Of them, 49.1 million (up 1.7% from the last year) will go on road trips, 4.7 million (up 6.6%) will fly and the remaining 1.55 million (up 11%) will travel by train, bus or cruise.

Airline companies expect record travel demand this Thanksgiving. The Transportation Security Administration expects to screen 30 million passengers from Nov 17 through Nov 28, the most ever. The Sunday after Thanksgiving is expected to be the busiest day during that period, with an estimated 2.9 million passengers taking to the skies.


ETFs to Binge On

Invesco S&P SmallCap Consumer Discretionary ETF (PSCD)

Invesco S&P SmallCap Consumer Discretionary ETF targets the small-cap segment of the broad consumer discretionary space by tracking the S&P SmallCap 600 Capped Consumer Discretionary Index. It holds 85 securities in its basket, with specialty retail taking the largest share at 33.9%, while household durables, and hotels, restaurants and leisure account for double-digit exposure each.

Invesco S&P SmallCap Consumer Discretionary ETF has attracted $30.6 million in AUM and charges 30 bps in annual fees. It trades in an average daily volume of about 2,000 shares and has a Zacks ETF Rank #2 (Buy) with a High risk outlook.

SPDR S&P Retail ETF (XRT)

SPDR S&P Retail ETF tracks the S&P Retail Select Industry Index, which provides exposure across large, mid and small-cap stocks. It holds 78 well-diversified stocks in its basket, with key holdings in apparel retail, other specialty retail and automotive retail.

SPDR S&P Retail ETF is the largest and most popular in the retail space, with AUM of $563.9 million and an average trading volume of 7.3 million shares. It charges 35 bps in annual fees and has a Zacks ETF Rank #2 with a Medium risk outlook.

AdvisorShares Restaurant ETF (EATZ)

AdvisorShares Restaurant ETF is an actively managed and the only ETF investing exclusively in the restaurant and food service industry, including restaurants, bars, pubs, fast food, take-out facilities, food catering services and more. AdvisorShares Restaurant ETF holds 26 securities in its basket with a modest concentration on the top firms.

AdvisorShares Restaurant ETF gathered $2.6 million in its asset base. EATZ charges 1.01% as annual fees and trades in an average daily volume of 1,000 shares.

AdvisorShares Hotel ETF (BEDZ)

AdvisorShares Hotel ETF is actively managed and provides exposure to the global hotel and lodging industry as well as its related services. It holds 27 stocks in its basket that are pretty spread across components.

AdvisorShares Hotel ETF charges 100 bps in annual fees and trades in an average daily volume of 500 shares. It has amassed $4.3 million in its asset base.

ALPS Global Travel Beneficiaries ETF (JRNY)

ALPS Global Travel Beneficiaries ETF provides diversified exposure to the global travel industry by tracking the S-Network Global Travel Index. The fund invests in 76 companies engaged in booking and rental agencies, airlines and airport services, hotels, casinos, and cruise lines, along with travel-related companies identified through machine learning algorithms, such as luxury retail, entertainment, leisure, food and beverage and payment processing vendors.

ALPS Global Travel Beneficiaries ETF has accumulated $6 million in its asset base and charges 65 bps in annual fees. JRNY trades in an average daily volume of 500 shares and has a Zacks ETF Rank #3.


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