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ETF Specialist

Investing in the Retail Sector Through ETFs

As the retail sector has rebounded, retail ETFs have become pricey.

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With a chill in the air, snow on the ground in some parts of the United States, and holiday music playing at every turn, retailers right now have to be wondering if this holiday season's sales numbers will be music--to their ears.

So far, retail numbers have looked rosy. For the past year, consumers have done a great job of deleveraging their personal balance sheets, which has meant that they have had more money in their wallets, and consumer sentiment has been steadily rising. Recent earnings reports from  Wal-Mart (WMT),  Target (TGT), and  Home Depot (HD) all have been greater than expected. Black Friday results for 2010 appeared very promising, with the National Retail Federation projecting a 9% increase in spending over that holiday weekend versus Black Friday 2009. On top of all that, online spending has reached new highs, with shoppers shelling out an average of more than $60 per transaction on Cyber Monday--the Monday after Thanksgiving--paving the way for Cyber Monday sales to clear $1 billion for the first time ever.

Robert Goldsborough does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.