ETF Investors Bet On Retail Revival As Holiday Spending Set To Hit Record High

As the holiday season shifts into high gear, retail investors find a new cause for celebration. This year may prove one of the most lucrative on record for the sector, with the National Retail Federation forecasting that U.S. holiday sales will range from $1.01 trillion to $1.02 trillion. The mix of resilient consumer demand, early promotions, and a now-cooling inflation backdrop brings up optimism for another leg higher in retail-focused ETFs.

Retail and consumer ETFs, bolstered by strong e-commerce growth and middle-income consumer spending, have thus far had a decent run in 2025 even as markets continue to feel the uncertainty of previous months. With Black Friday and Cyber Monday just a few weeks away, ETF investors are showing an increase in funds that combine the scale of big-box retailers like Walmart and Costco with the digital heft of Amazon.com Inc (NASDAQ:AMZN) and Shopify Inc (NASDAQ:SHOP).

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Retail ETFs Ride The Seasonal Wave

Among the top gainers so far this year, VanEck Retail ETF (NASDAQ:RTH) has gained more than 14%, offering investors broad exposure to the world’s retail titans. Counting Amazon at 21.3%, Walmart Inc (NYSE:WMT) at 9.3%, and Costco Wholesale Corp (NASDAQ:COST) at 7.6% as its three largest holdings, RTH captures both online and in-store spending trends. This compact portfolio of 25 large retailers offers a targeted way to play the seasonal boom, though it comes with a moderate 0.35% expense ratio.

Meanwhile, the Global X E-commerce ETF (NASDAQ:EBIZ) has been a standout performer, up over 22% year to date. The fund taps directly into the relentless expansion of digital retail, holding names such as Shopify Inc (NASDAQ:SHOP) at 5.1% and Amazon at 4%. As shoppers spend more time on screens rather than on shelves, EBIZ should continue to benefit from rising transaction volumes across various e-commerce platforms and logistics players supporting them. Its 0.50% fee is a tad higher, but its thematic focus on digital retail has rewarded investors handsomely this year.

For those looking for stability rather than thrills, the Vanguard Consumer Staples Index Fund ETF (NYSE:VDC) is a more defensive play. With Walmart and Costco accounting for 14% and 13% of its portfolio, respectively, it serves as a good hedge against market volatility, as it invests in essential products bought year-round. Its 0.09% fee puts it among the lowest in the industry.

Investor Takeaway

Whether it’s a bet on e-commerce momentum or steady staples, ETFs offer diversified ways to capture holiday-season exuberance without the risk of single-stock missteps. As the U.S. edges toward a record-breaking $1 trillion shopping spree, ETF investors prove once again that sometimes diversification is the best deal on the shelf.

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