5 ETFs To Shower Solid Gains This Thanksgiving Week

Photo by Priscilla Du Preez on Unsplash

Heading into the Thanksgiving week, history shows that the holiday-shortened week is a bullish feast for stock investors, even with low volumes. Per researchers, the S&P 500 Index has gained 0.54% on average during the week over the past 50 years, with 68% of the returns coming in positive.

While elevated inflation, Fed’s aggressive rate hike and recession fears have been playing foul on the stock market, higher consumer spending will provide a boost to the stocks this week. Investors seeking to cash in on big gains could consider ETFs form the areas likely to benefit from the Thanksgiving spending. These are Invesco S&P SmallCap Consumer Discretionary ETF (PSCD - Free Report), ProShares Online Retail ETF (ONLN - Free Report), AdvisorShares Restaurant ETF (EATZ - Free Report), Invesco Dynamic Food & Beverage ETF (PBJ - Free Report) and ALPS Global Travel Beneficiaries ETF (JRNY - Free Report).

According to Bespoke Investment Group, the Thanksgiving week has returned modest gains for stocks dating back to 1945. The researchers say that since that point, the entire week of Thanksgiving has averaged a 60-basis-point advance for the S&P 500, with the best returns coming on Wednesday before the holiday and Black Friday, and the only decline on average on Monday at the start of the week.

Strong Spending

Consumer spending is expected to reach $125 billion, up 10% year over year, is the Thanksgiving weekend this year despite inflation and higher interest rates. According to the National Retail Federation, a record 166.3 million people are planning to shop from Thanksgiving Day through Cyber Monday this year. This represents 8 million more people than last year and is the highest estimate since NRF began tracking this data in 2017. Americans will spend $125 billion, up 10% from last year. About 89% of consumers expect to shop in the period beginning Thanksgiving Day and ending on Cyber Monday, despite concerns around inflation and rising interest rates.

Black Friday continues to be the most popular day to shop, with 69% planning to shop, followed by 38% on Cyber Monday. Among the 114.9 million Black Friday shoppers, 67% say they expect to head to stores, up from 64% in 2021.

Online search (43%) remains the most popular source of gift inspiration, followed by friends and family (35%) and within a retail store (31%). The top five gift categories consumers plan to give are clothing (55%), followed by gift cards at 45%, toys at 37%, books/music/movies/video games at 33% and food/candy at 31%.

Americans are bracing for a costly Thanksgiving this year, with double-digit percent increases in the price of turkey, potatoes, stuffing, canned pumpkin and other staples. The average cost of serving 10 people for Thanksgiving is expected to be $64.05 (or less than $6.50 per person), up 20% from last year’s average of $53.31, according to the American Farm Bureau Federation's annual Thanksgiving dinner cost survey.

Upbeat Travel

Travel service provider American Automobile Association (AAA) expects 2022 to be the third-busiest Thanksgiving travel season in the United States over the last two decades. About 54.6 million people will travel 50 miles or more from home this Thanksgiving. This is up 1.5% from last year and represents 98% of the pre-pandemic volumes. Of them, 49 million (up 0.4% from the last year) will go on road trips, 4.5 million (up 8%) will fly, and the remaining 1.4 million (up 23%) will travel by train, bus or cruise.

ETFs to Shower Gains

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 91 securities in its basket, with specialty retail taking the largest share at 37%, while household durables, hotels, restaurants, and leisure account for double-digit exposure each.

Invesco S&P SmallCap Consumer Discretionary ETF has attracted $24.6 million in AUM and charges 29 bps in annual fees. It trades in an average daily volume of under 1,000 shares and has a Zacks ETF Rank #2 (buy) with a High risk outlook.

ProShares Online Retail ETF (ONLN)

ProShares Online Retail ETF offers exposure to the company that principally sells online or through other non-store channels, and then zeros in on the companies reshaping the retail space. It tracks the ProShares Online Retail Index, holding 25 stocks in its basket. ONLN is highly concentrated on the top two firms, while the other firms hold no more than 8% of assets. American firms make up three-fourths of the portfolio, while Chinese firms account for 21.2% share.

ProShares Online Retail ETF has accumulated $128.6 million in its asset base and charges 58 bps in annual fees. ONLN trades in an average daily volume of 114,000 shares.

AdvisorShares Restaurant ETF (EATZ)

AdvisorShares Restaurant ETF is an actively managed and the only ETF investing exclusively in the restaurant and foodservice industry, including restaurants, bars, pubs, fast food, take-out facilities, food catering services and more. AdvisorShares Restaurant ETF holds 27 securities in its basket with a higher concentration on the top firm.

AdvisorShares Restaurant ETF gathered $2.5 million in its asset base. EATZ charges 99 bps as annual fees and trades in an average daily volume of 1,000 shares.

Invesco Dynamic Food & Beverage ETF (PBJ)

Invesco Dynamic Food & Beverage ETF offers exposure to 31 stocks that are engaged in the manufacture, sale or distribution of food and beverage products, agricultural products and products related to the development of new food technologies by tracking the Dynamic Food & Beverage Intellidex Index.

With AUM of $346.8 million, Invesco Dynamic Food & Beverage ETF charges 63 bps in annual fees from investors and sees a light average daily volume of 70,000 shares. PBJ has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.

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 75 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 $7.7 million in its asset base and charges 65 bps in annual fees. JRNY trades in an average daily volume of 5,000 shares.

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Disclosure: Zacks.com contains statements and statistics that have been obtained from sources believed to be reliable but are not guaranteed as to accuracy or completeness. References to any ...

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