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5 Amazon ETFs to Tap on Record-Breaking Prime Day Sales

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Prime Day 2021 was yet another record-breaking, two-day event for the e-commerce behemoth Amazon (AMZN - Free Report) . Online sales surged 6.1% year over year to $11 billion in the 48-hour shopping event, topping the record $10.9 billion in e-commerce spending on Cyber Monday in 2020, according to Adobe.

Monday was the biggest day with $5.6 billion in digital sales, followed by $5.4 billion on Tuesday and was driven by strong demand for online shopping as consumers look forward to a return to normalcy. Per CNBC, the Adobe report stated that “the halo effect of Prime Day also played a significant role, giving both large and small online retailers significant revenue lifts.”

Big retailers with more than $1 billion in annual revenues saw a 29% jump in e-commerce sales during the Prime Day while smaller retailers with less than $10 million in annual revenues saw a 21% increase. According to Digital Commerce 360, e-commerce sales spiked 7.6% to $11.19 billion during the two-day shopping event (read: ETFs to Buy on Strong 2021 Retail Sales Outlook).

A record number of Prime members shopped for more than 250 million products worldwide during the event. The best-selling categories worldwide were tools, beauty, nutrition, baby care, electronics including Amazon Devices, apparel, and household products. In fact, Fire TV Stick 4K with Alexa Voice Remote was the hottest device this Prime Day. Additionally, Amazon Fire tablets and Fire Kids tablets, including the all-new Fire HD 10 tablet, Fire HD 8 tablet, and Fire HD 8 Kids tablet were also popular.

The top-selling products include iRobot Roomba 692 Robot Vacuum, Keurig K-Slim Coffee Maker, Apple Cider Vinegar Gummy Vitamins by Goli Nutrition, and Crest 3D White Professional Effects Whitestrips. Prime members also indulged in back-to-school shopping, with purchases of more than 600,000 backpacks, 1 million laptops, 1 million headphones, 240,000 notebooks, 40,000 calculators, and 220,000 Crayola products.

Given the Prime Day sales surge, investors could easily tap the opportune moment with some ETFs. Below we have highlighted five ETFs that have the largest allocation to this Internet giant and could make for compelling plays heading into the company’s Q2 earnings (expected to release on Jul 29):

ProShares Online Retail ETF (ONLN - Free Report)

This is the first ETF focused exclusively on retailers that principally sell online or through other non-store channels. It follows the ProShares Online Retail Index, holding 26 stocks in its basket. Amazon is the top firm accounting for about 25.4% of the portfolio. The product has amassed $1.1 billion in its asset base and currently trades in a moderate volume of around 80,000 shares a day on average. It charges 58 bps in annual fees from investors (read: 4 ETFs & Stocks to Buy This Summer From Top Sectors).

Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report)

This fund tracks the MSCI USA IMI Consumer Discretionary Index, holding 304 stocks in its basket. Of these, AMZN takes the top spot with 21.9% share. Internet & direct marketing retail makes up for the top sector with 25.4% share followed by specialty retail (20.4%), and hotels, restaurants & leisure (18.1%). The product has amassed $1.5 billion in its asset base while trading in a good volume of around 156,000 shares a day on average. It charges 8 bps in annual fees from investors and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.

Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report)

This product offers exposure to the broad consumer discretionary space by tracking the Consumer Discretionary Select Sector Index. It is the largest and most-popular product in this space, with AUM of $19.3 billion and an average daily volume of around 4 million shares. Holding 63 securities in its basket, Amazon takes the top spot with 23.6% of assets. Internet & direct marketing retail dominates about 25.4% of the portfolio, while specialty retail, hotels restaurants and leisure, and automobiles round off the next two spots with a double-digit allocation each. The fund charges 12 bps in annual fees and has a Zacks ETF Rank #2 with a Medium risk outlook.

Vanguard Consumer Discretionary ETF (VCR - Free Report)

This fund currently follows the MSCI US Investable Market Consumer Discretionary 25/50 Index and holds 315 stocks in its basket. Of these, Amazon occupies the top position with 21.8% allocation. Internet & direct marketing retail takes the largest share at 25.6% while automobile manufacturers, restaurants, and home improvement retail and round off the next two spots. VCR charges investors 10 bps in annual fees, while volume is moderate at nearly 94,000 shares a day. The product has managed about $6 billion in its asset base and carries a Zacks ETF Rank #2 with a Medium risk outlook.

VanEck Vectors Retail ETF (RTH - Free Report)

This fund provides exposure to the 25 largest retail firms by tracking the MVIS US Listed Retail 25 Index. Of these, AMZN takes the top position in the basket with 19.5% share. The product has amassed $252.6 million in its asset base and charges 35 bps in annual fees. Volume is light as it exchanges nearly 36,000 shares per day. RTH has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: ETFs in Focus as Amazon Agrees to Buy MGM Studio).

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