ETFs To Buy On Strong 2021 Retail Sales Outlook

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Consumers are feeling more optimistic about the economy with a wider reach of vaccination and reopening of the economy. Additionally, huge infrastructure spending package and expanded stimulus are acting as a huge catalyst for consumers to spend higher, resulting in an increase in retail sales. Notably, consumer spending accounts for more than two-thirds of U.S. economic activity.

The National Retail Federation (“NRF”) boosted the retail sales forecast for this year, citing a quicker-than-expected recovery and eagerness to shop. The agency projects retail sales to grow 10.5-13.5% to $4.44-$4.56 trillion, up from the previous forecast of 6.5-8.2% growth made in February. Online and non-store sales are expected to grow 18-23% to $1.09-$1.13 trillion as consumers keep using e-commerce. The outlook is based on the 7% GDP growth projection for this year, which represents the fastest growth since 1984.

E-commerce growth surged 39% to $196.7 billion in the first quarter of this year. The growth rate is nearly triple the 13.8% increase registered in Q1 2020. Per the latest data from eMarketer, retail U.S. e-commerce sales is expected to grow 17.9% to $933.3 billion. This is lower than last year's 18% growth but exceeds pre-pandemic estimates of 12.8%. Apparel and accessories sales will be the largest gainer with 28.7% growth, followed by furniture and home furnishings (11.4%), and office equipment and supplies (9.3%).

Given the strong trends, investors should bet on the following retail ETFs to tap the sales boom. We have presented them below:

Amplify Online Retail ETF (IBUY - Free Report)

This ETF has attracted $1.3 billion to its asset base and offers global exposure to companies that derive 70% or more revenues from online and virtual retail by tracking the EQM Online Retail Index. The fund is home to 73 stocks, each accounting for less than 2.6% of the assets. IBUY charges 65 bps in annual fees.

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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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