11 'Holiday' ETFs to Consider for 2024

"Enthusiasm is contagious." 

What sums up the annual holiday season for investors and investment advisors better than that quote from Napoleon Hill? 

This time of year is an annual ritual of celebrating life, family, friends and what great things may lie ahead. For those in the ETF industry and the whole of Wall Street, it is also a time where those who have had a disappointing year in their portfolios can say “good riddance” as the calendar turns. And everyone looks forward to what is possible in the coming year. 

I’m no psychologist, but I have observed over 37 years in this business that regardless of what is happening in the stock and bond markets, investors tend to be more optimistic this time of year than any other. Fresh starts, clean slates and lots of ways to enjoy and entertain us in late December certainly drives that sentiment. 

The slogan for the next two weeks might as well be, “bull or bear, we don’t care.”  

With that in mind, for those who can’t turn off the investment idea machine in their heads, even around holiday time, here is a holiday scene for ETF investors. 

ETFs for 2024  

These 11 funds are just some of the ways investors can consider taking their positive views on consumer spending trends, the travel industry and all that goes with holiday cheer. Because if 2024 turns out to be a continuation of late 2023 for the stock market, there’s a good chance these areas of the economy will be along for the post-holiday joy ride, rather than be a financial hangover. 

ETFs like those in this group are strong evidence of just how exchange-traded funds have moved investing forward by a giant leap. The ability for advisors and investors to slice and dice the markets in so many ways is an innovation many have yet to capitalize on. So, when it comes to this one segment of the market, here’s a starter kit to get acquainted with.  

Consumer-Discretionary ETFs 

The Consumer Discretionary Select Sector SPDR Fund (XLY) and the Vanguard Consumer Discretionary ETF (VCR) are direct competitors, as their mission and performance are highly correlated to each other. That’s even though XLY holds only 54 stocks and VCR owns 309. In addition, VCR has a ticker symbol that reminds we baby boomers of a long-gone era! 

Retail ETFs 

The SPDR S&P Retail ETF (XRT) and the VanEck Retail ETF (RTH) are another pair of funds that are direct competitors. However, they go about their business in very different ways. XRT owns 80 stocks, and its holdings are equal-weighted, each accounting for about 1.25% of the portfolio at rebalancing time. RTH is a highly focused ETF, concentrating on 25 stocks, with just five retail leaders comprising just over 50% of the fund. 

For those who want to filter out much of the legacy brick-and-mortar retail business, both the ProShares Online Retail ETF (ONLN) and the Amplify Online Retail ETF (IBUY) do so, and both are under-the-radar ETFs with less than $200 million in assets under management. 

Again, the key difference is the degree of concentration. ONLN owns 78 stocks, but the top 10 account for about 75% of assets, while IBUY is more equally weighted across only 25 holdings. 

Five More Consumer-Discretionary ETFs 

Finally, each of these five ETFs targets a sub-segment of the consumer-discretionary sector. The funds vary in size and structure, and taken together, they sound a bit like a travel brochure.  

• Invesco Leisure and Entertainment ETF (PEJ). 
• Defiance Hotel, Airline and Cruise ETF (CRUZ). 
• AdvisorShares Restaurant ETF (EATZ). 
• AdvisorShares Hotel ETF (BEDZ). 
• ETFMG Travel Tech ETF (AWAY). 

Shop smartly, travel safely and enjoy the holidays. And while you’re at it, don’t forget that ETFs can make 2024 better for many investment advisors and investors, if they approach the new year with purpose, process and discipline.