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

Key Points

• Consumer discretionary stocks have been uninspiring in 2025, but with Christmas approaching, that could change. 
• For the first time ever, holiday spending in the United States is projected to surpass $1 trillion.
• The VanEck Retail ETF can provide exposure for investors hoping for a near-term rally through the end of the year.

Between tariffs, sticky inflation, and ongoing weakness in the U.S. dollar, it has been a difficult year for the consumer discretionary sector. When household budgets are strained, consumers focus their purchasing power on essential goods and services, while new cars, electronics, vacations, and restaurant meals take a back seat. 

Such has been the case in 2025, with the consumer discretionary’s year-to-date gain of 0.51% representing the second-worst performance of all of the S&P 500’s 11 sectors. Only the consumer staples sector, down 0.90%, has fared worse this year.  

Those trends are likely to persist into 2026. But with the holidays just around the corner, all short-term bets are off. According to the National Retail Federation (NRF), holiday spending in the United States is projected to be between $1.01 trillion and $1.02 trillion for the first time ever.

This marks an increase of 3.7% over 2024, when that figure reached $976.1 billion.

And while the consumer discretionary sector has broadly underperformed this year, the Van Eck Retail ETF NASDAQ: RTH can provide investors with exposure to top companies in that space, which have the potential for a near-term rally that could carry through the end of the year.

The Who’s Who of Consumer Discretionary Stocks

The fund’s nearly 11% gain in 2025 trails the S&P 500, but it has outperformed the overall consumer discretionary sector. 

That has a lot to do with the RTH’s holdings. According to the ETF’s prospectus, it aims to replicate as closely as possible the performance of the MVIS® US Listed Retail 25 Index (MVRTHTR). This index tracks the overall performance of companies involved in retail distribution, e-commerce, multi-line and specialty retail, and food staples. 

In short, the RTH can put some of the biggest consumer names into your portfolio leading up to the holiday season. Among its top holdings are mega-cap giants, including Amazon NASDAQ: AMZN, Walmart NYSE: WMT, and Costco Wholesale NASDAQ: COST, which account for nearly 38% of the fund’s portfolio. 

The remaining 62% is spread across some of the most prolific consumer discretionary stocks in the S&P 500, including home improvement retailers Home Depot NYSE: HD and Lowe’s NYSE: LOW, off-price apparel and footwear stores TJX Companies NYSE: TJX and Ross Stores NASDAQ: ROST, and retailers such as Ulta Beauty NASDAQ: ULTA, lululemon athletica NASDAQ: LULU, Best Buy NYSE: BBY, and Target NYSE: TGT.

A DIY Santa Claus Rally for Your Portfolio

In total, the RTH offers 80.5% exposure to specialty retail, which should pan out nicely for shareholders as consumer spending ramps up during the last week of November. Despite waning sentiment, consumers are still expected to spend aggressively. The University of Michigan's Index of Consumer Sentiment fell to 51.0 in November from 53.6 in October—and a significant drop from 71.8 one year ago.

Yet despite that lower consumer confidence, Americans are still expected to spend big bucks on discretionary purchases through the end of the year. According to a study by Talker Research, nearly 1 in 3 Americans expects to slip into debt this holiday season. At the same time, the study found that over half of shoppers (51%) have created a holiday budget this year, but of those, a majority (64%) have already overspent or anticipate doing so. 

That isn’t just good news for Amazon, Walmart, Best Buy, and company—it’s good news for shareholders of the VanEck Retail ETF, who get access for a low-cost expense ratio of 0.35%, which is entirely offset by the fund’s dividend, which currently yields 0.70%, or $1.73 per share annually at current prices.

Is RTH a Buy Ahead of Black Friday? 

While the fund doesn’t boast significant institutional ownership at less than 26%, buyers have outnumbered sellers over the past 12 months to the tune of $45.14 million in inflows versus just $6.33 million in outflows. 

Meanwhile, Wall Street’s bears are largely staying away from the ETF as the holiday season approaches. Short interest currently stands at a miniscule 0.69%—a nearly 7% decrease since last month, suggesting that the smart money is also expecting big retail numbers in Q4. 

The fund’s average daily volume is light, with just 5,005 shares traded per day, which may limit liquidity for some investors. But of the fund’s 25 holdings, out of 628 analyst ratings, not one company in its portfolio is recommended as a Reduce, Sell, or Strong Sell. 

For investors eyeing a potential Santa Claus rally, the VanEck Retail ETF offers diversified exposure to top-performing retail names during a time of historically strong consumer spending.