New Retail Sector ETF

Despite high oil price, the holiday shopping season started with a bang during Thanks-Giving weekend. Walmart and others are reporting higher level of sales than last season. At this time some of you may like the idea of investing money on stocks of retail sector. The best time to invest in retail sector is in summer but still there's time. And if you are the one who does not believe in individual stocks and are always looking for diversification, an Exchange Traded Fund (ETF) might be just right for you.

The Wheaton, Illinois based PowerShares Capital Management introduced a new retail-sector ETF in October. It is called PowerShares Dynamic Retail Portfolio (PMR) and it departs significantly from traditional index-based mutual funds of this sector. It attempts to identify top-performing stocks by screening for fundamental growth, timeliness, valuation and other risk metrics. Its top holdings from the consumer discretionary sector include J.C. Penny Co. Inc. (JCP) , Bed Bath & Beyond Inc. (BBBY), Gap Inc. (GPS) and Nordstrom Inc. (JWN). The Kroger Co. (KR) is one of three consumer-staples holdings in the fund. It also holds three industrials companies including Adesa Inc. (KAR).

No one stock accounts for more than about 5% of the portfolio -- which is a very good buffer against the uncertainties associated with all individual stocks of this sector. Despite being an active portfolio, it has a low expense ratio of only 0.60%. Yesterday it closed at $16.27.