The retail sector has been beaten up due to many brick-and-mortar stores missing earnings expectations during the second half of 2015. Macy's, Inc., one of the largest publicly traded companies in the department store industry, plummeted 31.75% over the past three months as of Nov. 23, 2015. Macy's has a year-to-date return (YTD) of -34.65%. Additionally, Nordstrom, Inc. has a three-month return of -17.57% and a YTD return of -21%. The S&P Retail Select Industry Index, a major retail index, has a YTD return of -7.82% and a one-year return of -4.28%. However, the S&P Retail Select Industry Index has an annualized return of 13.08% over the past three years and an annualized return of 14.35% over the past five years.

While some of the big names in the retail sector have been producing below-expected earnings, value investors with long-term investment horizons should consider allocating satellite portions of well-diversified portfolios to exchange-traded funds (ETFs) tracking retail-related common stocks of companies.

Market Vectors Retail ETF

The Market Vectors Retail ETF (NYSEARCA: RTH) was issued on Dec. 20, 2011, by Van Eck Securities Corporation. As of Nov. 20, 2015, the fund has total net assets of $183.6 million and 26 holdings. As of Oct. 31, 2015, RTH has a three-month return of -2.46%, a YTD return of 7.2% and a one-year return of 19.92%. The fund charges an annual net expense ratio of 0.35%, which is less than the average expense ratio of consumer cyclical funds at 0.43%.

RTH seeks to replicate the general price and yield performance of the Market Vectors U.S. Listed Retail 25 Index, its benchmark index. RTH's benchmark index seeks to track the performance of companies engaged in retail distribution, wholesalers, on-line, specialty, food and other staples, direct mail and TV retailers. Under normal market conditions, RTH invests at least 80% of its total net assets in common stocks of companies included in its benchmark index.

Invesco Dynamic Retail ETF

The Invesco Dynamic Retail ETF (NYSEARCA: PMR) was issued by Invesco, on Oct. 26, 2005. As of Oct. 31, 2015, PMR has an annualized return of 10.54% since its inception. The fund has a YTD return of -2.32% and a one-year return of 9.59%. PMR charges an above-average annual net expense ratio of 0.63%, while the average annual net expense ratio of its category of consumer cyclical funds is 0.43%.

The fund seeks to provide investment results corresponding to the price and yield performance of the Dynamic Retail Intellidex Index, its benchmark index. The Dynamic Retail Intellidex Index is composed of common stocks of 30 U.S. retailers. The companies are selected based on earnings, quality, management, price momentum and value. Under normal market conditions, PMR invests at least 90% of its total net assets in common stocks of companies comprising its benchmark index.

As of Sept. 30, 2015, the fund's industry allocations are 21.85% to food retail; 18.95% to apparel retail; 11.73% to drug retail; 8.22% to consumer and electronics retail; 7.85% to hypermarkets and super centers; 5.44% to specialty stores; 5.34% to automotive retail; 5.19% to general merchandise stores; 5.06% to home improvement retail; and 2.98% to trucking.

SPDR S&P Retail ETF

The SPDR S&P Retail ETF (NYSEARCA: XRT) was issued on June 19, 2006, by State Street Global Advisors. It has a turnover rate of 45% and charges an annual net expense ratio of 0.35%, which is less than the average expense ratio in its category of consumer cyclical funds. As of Nov. 19, 2015, the fund offers a dividend yield of 1.16%.

XRT seeks to provide investment results corresponding to the total return performance of the S&P Retail Select Industry Index, its benchmark index. Under normal circumstances, XRT invests at least 80% of its total net assets in common stocks of companies comprising the index. As of Nov. 20, 2015, the fund's top five sector allocations are 21.87% to apparel retail; 17.53% to specialty stores; 15.24% to automotive retail; 14.89% to Internet retail; and 8.36% to food retail.

iShares U.S. Consumer Services ETF

The iShares U.S. Consumer Services ETF (NYSEARCA: IYC) was issued on June 12, 2000, by BlackRock. The fund is managed by BlackRock Fund Advisors and charges an annual expense ratio of 0.43%, which is in line with the average expense ratio of consumer cyclical funds. As of Oct. 31, 2015, IYC has a one-year return of 16.95%, an annualized return of 21.42% over the past three years and an annualized return of 6.88% since its inception.

The fund seeks to provide investment results corresponding to the Dow Jones U.S. Consumer Services Index, the fund's benchmark index. The Dow Jones U.S. Consumer Services Index serves as a barometer of the U.S. consumer services equity market and may include small-, mid- and large-cap stocks. Under normal market conditions, IYC invests at least 90% of its total net assets in common stocks and may invest in depositary receipts of companies included in its benchmark index.

As of Nov. 20, 2015, the fund's industry allocations are 35.93% to retail; 24.14% to media; 15.61% to consumer services; 14.11% to food and staples retail; 5.12% to transportation; 3.32% to health care equipment and services; 1.40% to commercial and professional services; 0.18% to cash and/or derivatives; 0.12% to software and services; and 0.07% to technology hardware and equipment.

First Trust Cnsmr Discret AlphaDEX ETF

The First Trust Cnsmr Discret AlphaDEX ETF (NYSEARCA: FXD) was issued on May 8, 2007, by First Trust Portfolios. The fund is advised by First Trust Advisors and charges a high annual net expense ratio of 0.70%. FXD's high annual net expense ratio can be explained by its high turnover rate of 131%. As of Nov. 20, 2015, the fund has 129 holdings and total net assets of $2.46 billion.

FXD seeks to provide investment results corresponding to the StrataQuant Consumer Discretionary Index, its benchmark index. Its benchmark index is maintained and sponsored by the NYSE Group and implements the AlphaDEX stock select methodology. Under normal circumstances, the fund invests at least 90% of its total net assets in common stocks of companies comprising its benchmark index. First Trust Advisors seek a correlation coefficient of 0.95 or better between FXD's performance and the benchmark index's performance.

As of Nov. 20, 2015, the fund's industry allocations are 23.21% to specialty retail; 16.2% to media; 9.9% to household durables; 9.57% to hotel, restaurants and leisure; 6.93% to textiles, apparel and luxury goods; 5.88% to auto components; 5.71% to Internet and catalog retail; 5.05% to multiline retail; 3.66% to diversified consumer services; and to 2.96% automobiles.