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ETF Areas to Gain From the Upcoming Holiday Shopping Season

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The latest retail sales data has pleasantly surprised investors. The metric rose 0.7% sequentially in August 2021 comparing favorably with market expectations of a 0.8% decline, per a CNBC article.

The retailers are prepping for the start to the holiday season (the late October-December period) that is considered a busy period for many industry players and market participants. The quarter is also marked by some popular retail events like Halloween, Thanksgiving, Cyber Monday, Black Friday and Christmas, which increase its significance among retailers.

According to Mastercard SpendingPulse, U.S. retail sales (excluding automotive and gas) for the “75 Days of Christmas” that will run from Oct 11-Dec 24 are expected to rise 6.8% from the year-ago period.

Against this backdrop, let’s study how investors can rake in some good returns by parking their money in ETFs that are well-positioned to gain from a busy shopping season this year:

Online Retail ETFs to Keep Shining

The pandemic has been a blessing in disguise for the e-commerce industry as people continue to practice social distancing and shopping online for all essentials, especially food items. Thus, at par with the digitization trend, the upcoming U.S. holiday season is expected to see a significant surge in online sales. Mastercard SpendingPulse predicts online sales to increase by 7.5% over the prior year during the “75 Days of Christmas” period.

Against this backdrop, let’s look at some ETFs that can benefit from the new shopping trend: Amplify Online Retail ETF (IBUY - Free Report) , ProShares Long Online/Short Stores ETF (CLIX - Free Report) , ProShares Online Retail ETF (ONLN) and Global X E-commerce ETF (EBIZ) (read: ETFs to Win & Lose as Delta Variant Cases Surge).

Consumer Discretionary ETFs Popularity to Rise

There has been improvement in consumer spending and confidence after the pandemic-induced record decline in March 2020.As restrictions were being relaxed in the United States, a number of restaurants and retailers started resuming business during the post-lockdown period. Therefore, the reopening of U.S. states brought optimism for players in the consumer discretionary sector and gained investors’ attention. Even during the holiday season, the sector is expected to see a boost in sales and demand as it attracts a major portion of consumer spending. Thus, to make the most of the opportunity, investors can consider The Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) , Vanguard Consumer Discretionary ETF (VCR - Free Report) , First Trust Consumer Discretionary AlphaDEX Fund (FXD) and Fidelity MSCI Consumer Discretionary Index ETF (FDIS) (see all Consumer Discretionary ETFs).

Digital Payments ETFs to See Increased Demand

The world is gradually moving toward digitization that is increasing the dominance of technology on the financial sector. A Market Data Forecast (MDF) report also highlights the growing opportunities in the global financial technology market, which is expected to see a CAGR of 23.4% between 2021 and 2026. According to the report, the fintech space is expected to reach a market value of around $324 billion by 2026.

Along with increased interest in online shopping, customers are resorting to digital payments to clear their bills. At the same time, merchants and utility providers are increasingly advocating the same.

In such a scenario, investors can take a look at ETFMG Prime Mobile Payments ETF (IPAY - Free Report) , Ecofin Digital Payments Infrastructure Fund (TPAY - Free Report) and Global X FinTech ETF (FINX) (read: A Comprehensive Guide to Fintech ETFs).

Transportation ETFs to Gain

This holiday season appears to be a comparatively strong period for retailers. Moreover, the growing inclination toward ecommerce has resulted in a wider reach for players in the retail space. That’s why there is likely to be a surge in demand for freight services to deliver the products ordered online. In such a scenario, investors can consider iShares U.S. Transportation ETF (IYT - Free Report) (read: Winning ETF Areas Amid Downbeat August Jobs Data).

Video Gaming ETFs to Get a Holiday Season Boost

Amid the health crisis, adults and kids are looking for some indoor fun activities, which is resulting in a boom in the video game industry. There are a number of reasons that can drive the sales of video games in the upcoming holiday season. An aggravating coronavirus outbreak, limitations or restrictions on some outdoor entertainment options like theme parks, amusement parks, travels or sports tickets, launch of new consoles, increasing player engagement and a number of players can take the video gaming industry to new highs, per The NPD Group report. To gain from the ongoing video game industry boom, investors can consider VanEck Video Gaming and eSports ETF (ESPO - Free Report) and Global X Video Games & Esports ETF (HERO) (read:  Sports Betting ETFs Set to Soar on NFL Wagers).

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