PEZ vs XRT

PEZDInvesco Dorsey Wright Consumer Cyclicals Momentum ETF

XRTBState Street SPDR S&P Retail ETF

In short

PEZ Most consumer discretionary funds own the sector by size. PEZ owns the trend: roughly 30 cyclical stocks picked and weighted by price momentum, reshuffled every quarter. Fee is 0.60% net of a waiver through August 31, 2028.

XRT Pure retail, not broad consumer discretionary. XRT equal-weights roughly 80 store chains and online sellers, so a small-cap mall retailer carries about as much freight as a mega-cap giant. It has been the sector's trading vehicle since 2006.

Stated mandate

PEZ The fund tracks an index designed to identify companies exhibiting relative strength, or momentum, within the consumer cyclicals segment.

XRT The fund seeks to provide investment results that generally correspond to the total return performance of the S&P Retail Select Industry Index, before fees and expenses.

Why people hold it

• PEZ The index ranks consumer cyclicals by relative strength, holds at least 30 of them, and reconstitutes every January, April, July and October, so fading names get cut on a schedule.nasdaqomx.com
• Weights come from each stock's momentum score, not its market cap, so the portfolio can reach well past the sector's handful of giants.nasdaqomx.com
• Listed since October 2006, it has run the same Dorsey Wright momentum rules on US consumer cyclicals through multiple consumer cycles. Not a recent launch chasing a theme.

• XRT Modified equal weight: the index resets constituents toward equal slices each quarter, so a single giant retailer does not run the whole fund.spglobal.com
• Retail only: apparel, automotive, broadline, computer and electronics, staples merchandise, drug, food and specialty stores. Car dealers count, carmakers do not.ssga.com
• Trading since 2006 and very actively traded, one of the older and busier ways to take a targeted position on US retail rather than a whole sector.ssga.com
• Sticks tightly to its index and stands among the stronger builds in its consumer discretionary peer group. Pays quarterly.

Worth knowing

• PEZ Cost sits above the category median: 0.60% net of a waiver through August 31, 2028, against a 0.97% gross ratio, versus 0.08% for XLY and 0.09% for VCR.
• One of the smaller and thinner-traded funds in its category, so the bid-ask spread is a real part of the cost of getting in and out.
• A full quarterly rebuild means heavy turnover and a roster that can look unrecognizable year to year; momentum rules can get whipsawed when sector leadership flips.nasdaqomx.com

• XRT At 0.35% it costs more than broad cap-weighted discretionary funds like XLY and FDIS near 0.08%. The focus and the equal weighting are what the extra buys.
• Equal weighting pulls small and mid-cap chains up next to the giants, so moves can be sharper than a cap-weighted sector fund's.ssga.com
• One industry, roughly 80 names. When shoppers tighten up, there is no other sector inside the fund to cushion it.

Full PEZ profile⁠

Full XRT profile⁠