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Amazon Soars Ahead of Stock Split: ETFs to Gain

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Amazon (AMZN - Free Report) has rebounded strongly this week after shareholders approved the 20-for-1 stock split, announced in March. Amazon shareholders of record at the close of May 27 will receive 19 additional shares on or before Jun 3. Post-split trading will begin on Jun 6. The stock has soared more than 12% since shareholders voted in favor of the split on May 25.

Investors seeking to tap Amazon’s potential surge should consider ETFs having double-digit allocation to this e-commerce giant. These include ProShares Online Retail ETF (ONLN - Free Report) , Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report) , Vanguard Consumer Discretionary ETF (VCR - Free Report) , Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) and VanEck Vectors Retail ETF (RTH - Free Report) .

The stock split came at the right time as Amazon has been beaten down along with many other high-growth tech stocks this year. Notably, shares of AMZN have dropped 23.3% so far this year (read: ETFs & Stocks to Win on Uptick in April Retail Sales).

The move will make the stock more accessible to investors and employees, and attract individual investors who make small trades. This is because a stock split creates more shares of a company without changing the underlying dollar value of any single investor's holdings. By increasing the number of shares available, the company can attract new investors who might otherwise not be able to afford a single share at a high price.

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 38 stocks in its basket. Amazon is the top firm accounting for 26.1% of the portfolio.

ProShares Online Retail ETF has amassed $318.4 million in its asset base and currently trades in a moderate volume of around 96,000 shares a day, on average. It charges 58 bps in annual fees from investors.

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

Fidelity MSCI Consumer Discretionary Index ETF tracks the MSCI USA IMI Consumer Discretionary Index, holding 329 stocks in its basket. Of these, Amazon takes the top spot with a 19.1% share. Internet & direct marketing retail makes up the top sector, with a 21.5% share, followed by specialty retail (19.6%), hotels restaurants & leisure (18.6%) and automobiles (17.7%).

Fidelity MSCI Consumer Discretionary Index ETF has amassed $1.1 billion in its asset base while trading in a good volume of around 162,000 shares a day on average. It charges 8 bps in annual fees from investors and has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook (read: US Consumer Sentiment Dips in May: Will ETFs Suffer?).

Vanguard Consumer Discretionary ETF (VCR - Free Report)

Vanguard Consumer Discretionary ETF currently follows the MSCI US Investable Market Consumer Discretionary 25/50 Index and holds 303 stocks in its basket. Of these, Amazon occupies the top position, with a 19.2% allocation. Internet & direct marketing retail takes the largest share at 21.6%, while automobile manufacturers, home improvement retail and retail round off the next three spots.

VCR charges investors 10 bps in annual fees, while volume is moderate at nearly 167,000 shares a day. The product has managed about $4.7 billion in its asset base and carries a Zacks ETF Rank #1 with a Medium risk outlook.

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

Consumer Discretionary Select Sector SPDR Fund offers exposure to the broad consumer discretionary space by tracking the Consumer Discretionary Select Sector Index. Holding 60 securities in its basket, Amazon takes the top spot with 20.7% of assets. Internet & direct marketing retail dominates about 22% of the portfolio, while automobiles, hotels, restaurants and leisure, and specialty retail round off the next three spots with a double-digit allocation each.

Consumer Discretionary Select Sector SPDR Fund is the largest and most popular product in this space, with AUM of $16 billion and an average daily volume of around 9.5 million shares. It charges 0.10% in expense ratio and has a Zacks ETF Rank #1 with a Medium risk outlook (read: Why Fear High Inflation? Play Cyclical ETFs).

VanEck Vectors Retail ETF (RTH - Free Report)

VanEck Vectors Retail ETF provides exposure to the 25 largest retail firms by tracking the MVIS US Listed Retail 25 Index, which measures the performance of the companies involved in retail distribution, wholesalers, online, direct mail and TV retailers, multi-line retailers, specialty retailers and food and other staples retailers. Amazon takes the top position in the basket with an 18.1% share.

VanEck Vectors Retail ETF has amassed $157.4 million in its asset base and charges 35 bps in annual fees. It trades in a lower volume of 12,000 shares a day on average. VanEck Vectors Retail ETF has a Zacks ETF Rank #1 with a Medium risk outlook.