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Chinese e-commerce giant Alibaba Group (BABA - Free Report) reported robust third-quarter fiscal 2023 before the opening bell on Feb 23, wherein it beat the Zacks Consensus Estimate for both earnings and revenues.
Following the earnings beat, shares of Alibaba initially jumped 6% but erased all the gains by the end of the day and closed down 0.6%. This has put 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 $2.79 per ADS surpassed the Zacks Consensus Estimate of $2.29 and increased 14% from the year-ago earnings. Revenues grew 2% year over year to $35.92 billion and edged past the consensus mark of $35.48 billion. The strong performance is attributable to efforts to cut costs and China's easing of COVID-19 curbs.
Alibaba is likely to see faster revenue growth over the coming quarters, as the full effect of the Chinese economic reopening is felt. Management believes that the economy is "getting back on track" and "consumer confidence and business confidence are rising," which will provide a boost to the company’s revenues and earnings (see: all the Technology ETFs here).
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 13.7% of the portfolio (read: ETFs From Best and Worst Zones at Midway Q1).
ProShares Online Retail ETF has amassed $127.8 million in its asset base and currently trades in a moderate volume of around 104,000 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 49 emerging market-based depositary receipts by tracking the S&P/BNY Mellon Emerging Markets 50 ADR Index. About 32% of the portfolio is allotted to Chinese firms, with Alibaba occupying the second position at 13.4%. 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 23.8% share, respectively, while financials and materials round off the next two spots.
Invesco BLDRS Emerging Markets 50 ADR Index Fund has amassed $133.3 million in its asset base while trading in a lower volume of about 16,000 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 second position at 10.3% of total assets.
First Trust Dow Jones International Internet ETF has AUM of $33.6 million and charges 65 bps in fees per year. It trades in an average daily volume of 15,000 shares.
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 64 stocks, with Alibaba occupying the third position at 7.9% of assets. Consumer discretionary and communication services sectors take the largest share at 52% and 26.6%, respectively (read: 5 ETFs Riding Higher on a China Stock Rally).
Invesco Golden Dragon China ETF has AUM of $244.3 million and charges 70 bps in annual fees. It trades in an average daily volume of 121,000 shares and has a Zacks ETF Rank #3 (Hold).
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 third spot with an 8% share. Consumer discretionary and consumer services are the top two sectors, with 54.5% and 35.4%, respectively. About 65% of the portfolio is dominated by China, with South Korea and South Africa rounding off the next two spots.
Global X Emerging Markets Internet & E-commerce ETF has accumulated $2.7 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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Alibaba Tops Q3 Earnings Estimates: ETFs to Tap
Chinese e-commerce giant Alibaba Group (BABA - Free Report) reported robust third-quarter fiscal 2023 before the opening bell on Feb 23, wherein it beat the Zacks Consensus Estimate for both earnings and revenues.
Following the earnings beat, shares of Alibaba initially jumped 6% but erased all the gains by the end of the day and closed down 0.6%. This has put 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 $2.79 per ADS surpassed the Zacks Consensus Estimate of $2.29 and increased 14% from the year-ago earnings. Revenues grew 2% year over year to $35.92 billion and edged past the consensus mark of $35.48 billion. The strong performance is attributable to efforts to cut costs and China's easing of COVID-19 curbs.
Alibaba is likely to see faster revenue growth over the coming quarters, as the full effect of the Chinese economic reopening is felt. Management believes that the economy is "getting back on track" and "consumer confidence and business confidence are rising," which will provide a boost to the company’s revenues and earnings (see: all the Technology ETFs here).
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 13.7% of the portfolio (read: ETFs From Best and Worst Zones at Midway Q1).
ProShares Online Retail ETF has amassed $127.8 million in its asset base and currently trades in a moderate volume of around 104,000 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 49 emerging market-based depositary receipts by tracking the S&P/BNY Mellon Emerging Markets 50 ADR Index. About 32% of the portfolio is allotted to Chinese firms, with Alibaba occupying the second position at 13.4%. 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 23.8% share, respectively, while financials and materials round off the next two spots.
Invesco BLDRS Emerging Markets 50 ADR Index Fund has amassed $133.3 million in its asset base while trading in a lower volume of about 16,000 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 second position at 10.3% of total assets.
First Trust Dow Jones International Internet ETF has AUM of $33.6 million and charges 65 bps in fees per year. It trades in an average daily volume of 15,000 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 64 stocks, with Alibaba occupying the third position at 7.9% of assets. Consumer discretionary and communication services sectors take the largest share at 52% and 26.6%, respectively (read: 5 ETFs Riding Higher on a China Stock Rally).
Invesco Golden Dragon China ETF has AUM of $244.3 million and charges 70 bps in annual fees. It trades in an average daily volume of 121,000 shares and has a Zacks ETF Rank #3 (Hold).
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 third spot with an 8% share. Consumer discretionary and consumer services are the top two sectors, with 54.5% and 35.4%, respectively. About 65% of the portfolio is dominated by China, with South Korea and South Africa rounding off the next two spots.
Global X Emerging Markets Internet & E-commerce ETF has accumulated $2.7 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).