The following post was written and / or published as part of a collaboration between Benzinga’s internal sponsored content team and a Benzinga financial partner.
Despite the economic hardships plaguing much of the national and global economy, consumers have been spending more than expected this holiday season.
The National Retail Federation reported on Friday that holiday retail sales – a figure that tracks retail spending through November and December excluding restaurants, car dealerships and gas stations – increased by 8, 3% year over year in 2020.
Holiday sales increased in six of nine retail categories, according to the report, with online and other non-store sales (i.e. e-commerce, which grew 23.9%) led by building material and garden supply stores (up 19%) and sporting goods stores (+ 15.2%).
(It’s also worth noting that the Commerce Department, which tracks purchases made in stores, restaurants, and online, reported that U.S. retail sales fell 0.7% month to month. the other in December, below the estimate of 0.2%. The difference could be due to the high expectations of economists.)
Winners and losers
Recent reports from a number of retailers support the idea that e-commerce demand was extremely strong in the fourth quarter.
Target company (NYSE: TGT) reported that same-store sales for December were up 17.2%, but much of that growth was due to a 102% increase in digital sales for the period. Costco Wholesaler Corp. (NASDAQ: COST) had similar results. December comparable sales for the warehouse giant rose 10.7% while e-commerce sales rose 62.5%.
However, not all retailers were saved by online demand.
Big store Nordstrom Inc (NYSE: JWN) reported that holiday sales fell 22% despite a 23% increase in digital sales. Jewelers Signet rings (NYSE: SIG), the parent company of Kay Jewelers, Zales and other jewelers, said holiday sales did not increase year over year, despite a 60% increase in e-commerce .
In specialized retail, L Brands, Inc. (NYSE: LB) said comparable sales increased 5% across its business portfolio. This was due to a 17% increase at Bath & Body Works, which offset a 9% drop at Victoria’s Secret. Zumiez (NASDAQ: ZUMZ) said vacation sales only rose 1.7%.
All of this to say that retail, at least its online iteration, is alive and well in the pandemic, and it is pushing merchants into commerce. This is evidenced by the recent performance of the Direxion Daily Retail Bull 3X Actions (NYSE: RETL), which hit a new all-time high in January.
Not only has RETL grown nearly 40% over the past month, but the fund has additionally received over $ 341 million in inflows during that time period, more than $ 100 million more than the next. nearest Direxion fund.
RETL provides three times the daily performance of the S&P Retail Select Industry Index and owns all the stocks mentioned above.
However, what has really motivated the fund in recent weeks is its exposure to several high-profile stocks. As of January 19, nearly 5% of the fund was made up of Magnite Inc (NASDAQ: MGNI), Flashing load (NASDAQ: BLNK) and Gamestop (NYSE: GME).
Consumerism is king
The bottom line is that the strong retail sales are a product of the fact that American consumers are in a fairly healthy position despite the global pandemic. Government measures, as well as the convenience of electronic commerce, have certainly helped to facilitate this trend.
All in all, these factors could still support strong online spending in 2021. And with another round of stimulus measures expected from the Biden administration, it’s not out of the question that bullish retailing could turn around. to chase.
Past performance does not represent future results. The return on investment and the principal value of an investment fluctuate. An investor’s shares, once redeemed, may be worth more or less than their original cost; the current performance may be lower or higher than the quoted performance. Short-term performance in particular is not a good indication of the future performance of the fund, and an investment should not be made on the basis of returns alone.
For month-end and standardized performance, click here (https://www.direxion.com/product/daily-retail-bull-3x-etf)
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RETL at 12/31/20
(subject to change)
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Market disruptions resulting from COVID-19. The COVID-19 outbreak has had a negative impact on the global economy, individual countries, individual businesses and the market in general. The future impact of COVID-19 is currently unknown, and it may exacerbate other risks that apply to the Fund.
Shares in Direxion shares are bought and sold at market price (not net asset value) and are not individually redeemed by a Fund. Market price returns are based on the midpoint of the bid / ask spread at 4:00 p.m. EST (when NAV is normally calculated) and do not represent the returns you would receive if you traded stocks at other times. Brokerage commissions will reduce returns. Fund returns assume that dividends and capital gains distributions were reinvested in the Fund at net asset value. Some performance results reflect expense reimbursements or recoveries and fee waivers in effect during certain periods shown. Without these refunds or recoveries and fee waivers, the results would have been less favorable.
The “S&P Retail Select Industry Index” is a product of S&P Dow Jones Indices LLC (“SPDJI”) and has been used under license by Rafferty Asset Management, LLC (“Rafferty”). Standard & Poor’s® and S & P® are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); and these trademarks have been used under license by SPDJI and sublicensed for certain purposes by Rafferty. Rafferty ETFs are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates and neither party makes any representation regarding the advisability of investing in such products and does not assume no responsibility for errors. , omissions or interruptions of the S&P Retail Select Industry Index.
Risks associated with Direxion’s actions – An investment in the Fund involves risks, including the possible loss of capital. The Fund is not diversified and involves risks associated with the Fund concentrating its investments in a particular industry, sector or geographic region, which may cause increased volatility. The use of derivative products such as futures and swaps is subject to market risks which may cause their price to fluctuate over time. The Fund does not attempt, and should not be expected, to provide returns that are three times the return of its Underlying Index for periods other than a single day. The Fund’s risks include the effects of compound risk and market volatility, leverage risk, market risk, market disruption risk, risk associated with aggressive investment techniques, counterparty risk. , intraday investment risk, correlation risk / daily monitoring of indices, other investment companies (including ETFs) Risk, and risks specific to securities in the Distribution and Consumer Discretionary Sector. Retailing and related industries can be significantly affected by the performance of the national and international economy, consumer confidence and spending, intense competition, demographic changes and changing consumer tastes and preferences. Please consult the summary and the full prospectus for a more complete description of these and other risks of the Fund.
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The foregoing post was written and / or published as part of a collaboration between Benzinga’s internal sponsored content team and a Benzinga financial partner. While the article is not and should not be construed as editorial content, the Sponsored Content team works to ensure that all information contained in it is true and accurate to the best of their knowledge and ability. research. This content is for informational purposes only and is not intended to be investment advice.