Best Sector: Consumer Discretionary
Retail stocks have been an area of surprise strength in 2013, with the Russell 3000 logging almost 32% returns for the sector since Jan. 1.
Small-cap Stein Mart (SMRT) is among the Russell 3000’s biggest winners. Stein Mart, a $600 million retailer of apparel, is up over 80% year to date.
The big guys have also done well, however, and it’s across all areas of the discretionary spending spectrum. Teen clothing king Gap Inc. (GPS) is up 40% so far this year, automaker Ford (F) is up 30% and appliance and electronics retailer H.H. Gregg (HGG) has soared by more than triple digits.
If you’re looking to play a rebound in spending and a broader cyclical recovery, clearly discretionary plays are the way to go. Funds in the space include the Vanguard Consumer Discretionary ETF (VCR) and the Consumer Discretionary SPDR (XLY).