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E-commerce behemoth Amazon.com, Inc. (AMZN - Free Report) gained 1.4% on December 27, 2016, after the company reported encouraging sales for the holiday season. Having shipped more than 1 billion items worldwide, Amazon said that this was its best holiday season ever (read: 4 Reasons to Buy Retail ETFs This Holiday Season).
Amazon’s voice-activated Echo home assistant and its smaller version, Echo Dot, were the best-selling products across Amazon this year. It sold nine times more than the 2015 holiday season. More than two-third of the purchases were made through mobile devices.
The sales data looks impressive after Amazon disappointed investors with a wide Q3 earnings miss and a downbeat outlook for the holiday quarter on increased spending on shipping, video offerings and other projects (read: ETFs to Watch Post Amazon's Q3 Earnings Miss).
Enthusiasm for the stock will definitely spread into the ETF world, especially the funds with the highest allocation to this Internet giant. Below we highlight some of the funds that will be in focus in the coming days and could see some upside.
This fund provides exposure to the 26 largest retail firms by tracking the MVIS US Listed Retail 25 Index. Of these, AMZN takes the top position in the basket with almost 16% share. The ETF has a certain tilt toward specialty retail, which accounts for 28% share while Internet retail (20%), hypermarkets (12%), drug stores (10%), departmental stores (10%) and healthcare services (9%) round off the next five. The product has amassed $97.7 million in its asset base and charges 35 bps in annual fees. Volume is light as it exchanges nearly 19,000 shares per day. RTH has a Zacks ETF Rank of 1 or ‘Strong Buy’ rating with a Medium risk outlook (read: 5 Last Minute ETF Deals Before Christmas Eve).
This ETF provides targeted exposure to the domestic consumer services stocks by tracking the Dow Jones U.S. Consumer Services Index. It holds 184 stocks in its basket with Amazon being the top firm with 10.1% share. In terms of industrial exposure, retailing makes up the largest share with 37.4%, followed by media (23.4%), consumer services (15.5%), and foods & staples retailing (14.2%). The fund has amassed $932.7 million in its asset base while trading in a small volume of 38,000 shares a day on an average. It charges 44 bps in annual fees from investors and has a Zacks ETF Rank of 3.
Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report)
This fund tracks the MSCI USA IMI Consumer Discretionary Index, holding 377 stocks in its basket. Out of these, AMZN takes the seventh spot with 10.2% share. Media makes up for the top sector with 24.2% share, followed by specialty retail (18.9%), Internet & direct marketing retail (15.9%), and hotels restaurants & leisure (15.7%). The product has amassed $237.9 million in its asset base while trading in a good volume of around 89,000 shares a day on an average. It charges 8.4 bps in annual fees from investors and has a Zacks ETF Rank of 1 (read: ETF Strategies for December).
First Trust Dow Jones Internet Index Fund (FDN - Free Report)
This is one of the most popular and liquid ETFs in the broad technology space with an AUM of $3.86 billion and average daily volume of more than 503,000 shares. The fund tracks the Dow Jones Internet Composite Index and charges 54 bps in fees per year. In total, the fund holds 41 stocks, with Amazon taking the second spot at 9.9%. From a sector look, Internet and mobile applications account for almost half of the portfolio while Internet retail makes up for 21%. FDN has a Zacks ETF Rank of 3 or ‘Hold’ rating with a High risk outlook.
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ETFs to Ride on Amazon's Best Ever Holiday Season
E-commerce behemoth Amazon.com, Inc. (AMZN - Free Report) gained 1.4% on December 27, 2016, after the company reported encouraging sales for the holiday season. Having shipped more than 1 billion items worldwide, Amazon said that this was its best holiday season ever (read: 4 Reasons to Buy Retail ETFs This Holiday Season).
Amazon’s voice-activated Echo home assistant and its smaller version, Echo Dot, were the best-selling products across Amazon this year. It sold nine times more than the 2015 holiday season. More than two-third of the purchases were made through mobile devices.
The sales data looks impressive after Amazon disappointed investors with a wide Q3 earnings miss and a downbeat outlook for the holiday quarter on increased spending on shipping, video offerings and other projects (read: ETFs to Watch Post Amazon's Q3 Earnings Miss).
Enthusiasm for the stock will definitely spread into the ETF world, especially the funds with the highest allocation to this Internet giant. Below we highlight some of the funds that will be in focus in the coming days and could see some upside.
VanEck Vectors Retail ETF (RTH - Free Report)
This fund provides exposure to the 26 largest retail firms by tracking the MVIS US Listed Retail 25 Index. Of these, AMZN takes the top position in the basket with almost 16% share. The ETF has a certain tilt toward specialty retail, which accounts for 28% share while Internet retail (20%), hypermarkets (12%), drug stores (10%), departmental stores (10%) and healthcare services (9%) round off the next five. The product has amassed $97.7 million in its asset base and charges 35 bps in annual fees. Volume is light as it exchanges nearly 19,000 shares per day. RTH has a Zacks ETF Rank of 1 or ‘Strong Buy’ rating with a Medium risk outlook (read: 5 Last Minute ETF Deals Before Christmas Eve).
iShares U.S. Consumer Services ETF (IYC - Free Report)
This ETF provides targeted exposure to the domestic consumer services stocks by tracking the Dow Jones U.S. Consumer Services Index. It holds 184 stocks in its basket with Amazon being the top firm with 10.1% share. In terms of industrial exposure, retailing makes up the largest share with 37.4%, followed by media (23.4%), consumer services (15.5%), and foods & staples retailing (14.2%). The fund has amassed $932.7 million in its asset base while trading in a small volume of 38,000 shares a day on an average. It charges 44 bps in annual fees from investors and has a Zacks ETF Rank of 3.
Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report)
This fund tracks the MSCI USA IMI Consumer Discretionary Index, holding 377 stocks in its basket. Out of these, AMZN takes the seventh spot with 10.2% share. Media makes up for the top sector with 24.2% share, followed by specialty retail (18.9%), Internet & direct marketing retail (15.9%), and hotels restaurants & leisure (15.7%). The product has amassed $237.9 million in its asset base while trading in a good volume of around 89,000 shares a day on an average. It charges 8.4 bps in annual fees from investors and has a Zacks ETF Rank of 1 (read: ETF Strategies for December).
First Trust Dow Jones Internet Index Fund (FDN - Free Report)
This is one of the most popular and liquid ETFs in the broad technology space with an AUM of $3.86 billion and average daily volume of more than 503,000 shares. The fund tracks the Dow Jones Internet Composite Index and charges 54 bps in fees per year. In total, the fund holds 41 stocks, with Amazon taking the second spot at 9.9%. From a sector look, Internet and mobile applications account for almost half of the portfolio while Internet retail makes up for 21%. FDN has a Zacks ETF Rank of 3 or ‘Hold’ rating with a High risk outlook.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>