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Alibaba Fiscal Q2 Earnings Puts These ETFs in Focus

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Chinese e-commerce giant Alibaba Group (BABA - Free Report) reported second-quarter fiscal 2023 before the opening bell on Nov 17, wherein it beat the Zacks Consensus Estimate for earnings but lagged on revenues.

Driven by the earnings beat, shares of Alibaba jumped 7.8% to close the day, putting the ETFs with the largest allocation to the Chinese e-commerce giant in focus. These include ProShares Online Retail ETF (ONLN - Free Report) , Invesco BLDRS Emerging Markets 50 ADR Index Fund , First Trust Dow Jones International Internet ETF (FDNI - Free Report) , Invesco Golden Dragon China ETF (PGJ - Free Report) and Global X Emerging Markets Internet & E-commerce ETF .

Earnings of $1.82 per ADS surpassed the Zacks Consensus Estimate of $1.67 and increased 15% from the year-ago earnings. Revenues grew 3% year over year to $29.12 billion and fell short of the consensus mark of $31.07 billion. The revenue growth was one of the weakest since going public. COVID-19 restrictions and slower consumer spending hurt revenues (see: all the Technology ETFs here).  

Alibaba unveiled a new buyback plan. It has extended its share buyback program by $15 billion on top of its existing $25 billion program. The program will be effective through March 2025. Alibaba said it repurchased around $18 billion of its shares under its existing program as of Nov 16. Additionally, the Chinese online giant expressed confidence that COVID-19 restrictions are beginning to ease enough to benefit its business.

ETFs in Focus

ProShares Online Retail ETF (ONLN - Free Report)

ProShares Online Retail ETF offers exposure to companies that principally sell online or through other non-store channels, and then zeros in on the companies that reshape the retail space. It tracks the ProShares Online Retail Index, holding 25 stocks in its basket. Alibaba is the second firm accounting for 12.2% of the portfolio (read: Kroger to Become Grocery Superchain: ETFs to Tap).

ProShares Online Retail ETF has amassed $133.3 million in its asset base and currently trades in a moderate volume of around 114,000 shares a day, on average. It charges 58 bps in annual fees from investors.

Invesco BLDRS Emerging Markets 50 ADR Index Fund
 
Invesco BLDRS Emerging Markets 50 ADR Index Fund offers exposure to 50 emerging market-based depositary receipts by tracking the S&P/BNY Mellon Emerging Markets 50 ADR Index. About 28% of the portfolio is allotted to Chinese firms, with Alibaba occupying the second position at 11.5%. Taiwan, India and Brazil round off the next three spots in terms of country exposure. Invesco BLDRS Emerging Markets 50 ADR Index Fund has the largest exposure in the information technology and consumer discretionary sectors, with at least 29.2% and 21.5% share, respectively, while financials and materials round off the next two spots.

Invesco BLDRS Emerging Markets 50 ADR Index Fund has amassed $127.2 million in its asset base while trading in a lower volume of about 6,000 shares. ADRE charges 29 bps in fees per year and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.

First Trust Dow Jones International Internet ETF (FDNI - Free Report)

First Trust Dow Jones International Internet ETF follows the Dow Jones International Internet Index, giving investors exposure to the 41 largest and most actively traded non-U.S. international companies in the Internet industry that are engaged in Internet commerce and Internet services. Alibaba occupies the third position at 9.1% of total assets.

First Trust Dow Jones International Internet ETF has AUM of $31 million and charges 65 bps in fees per year. It trades in an average daily volume of 6,000 shares.

Invesco Golden Dragon China ETF (PGJ - Free Report)

Invesco Golden Dragon China ETF follows the NASDAQ Golden Dragon China Index, which offers exposure to the U.S. exchange-listed companies headquartered or incorporated in the People’s Republic of China. It holds a basket of 68 stocks, with Alibaba occupying the third position at 8.3% of assets. Consumer discretionary and communication services sectors take the largest share at 55% and 21.6%, respectively (read: Why China Stocks & ETFs are Soaring).

Invesco Golden Dragon China ETF has AUM of $234.7 million and charges 70 bps in annual fees. It trades in an average daily volume of 113,000 shares and has a Zacks ETF Rank #5 (Strong Sell).

Global X Emerging Markets Internet & E-commerce ETF

Global X Emerging Markets Internet & E-commerce ETF seeks to invest in companies positioned to benefit from the increased adoption of Internet and E-commerce technologies in emerging markets. It tracks the Nasdaq CTA Emerging Markets Internet & E-commerce Net Total Return Index, holding 39 stocks in its basket. Out of these, Alibaba takes the fifth spot with 7.3% share. Consumer discretionary and consumer services are the top two sectors, with 54.3% and 32%, respectively.

Global X Emerging Markets Internet & E-commerce ETF has accumulated $2.5 million in its asset base and trades in an average daily volume of 1,000 shares. It charges 65 bps in fees per year and has a Zacks ETF Rank #4 (Sell).

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