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Cyber Week Sales Put These ETFs in Focus

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Key Takeaways

  • Adobe expects Cyber Monday to be the biggest shopping day of the year, with a record $13.2 billion in sales.
  • Exchange-traded funds IPAY, GAMR, SMH, IBUY and XRT stand to gain during the holiday season.
  • Register now to see our 7 Best Stocks for the Next 30 Days report - free today!

A record 183.4 million people are planning to shop in stores and online between Thanksgiving Day (Nov. 28) and Cyber Monday (Dec. 2) in 2024, up from the previous record of 182 million in 2023, according to an NRF survey. Lucrative deals and hefty discounts (57% of consumers believe), a traditional trend (28%) and the start of the holiday season in the Thanksgiving week itself (24%) have led to this growth in the number of shoppers this year.

While consumers will spread their shopping across channels throughout the five-day holiday weekend, Black Friday remains the most popular day (131.7 million expected shoppers) to shop, followed by Cyber Monday (72.3 million). Cyber Week (the 5-day period including Thanksgiving, Black Friday and Cyber Monday) is expected to drive $40.6 billion in online spend, up 7.0% year over year (YoY) and representing 16.9% of the overall holiday season, per Adobe.

Adobe expects Cyber Monday to remain the season’s and the year’s biggest shopping day, resulting in a record $13.2 billion in spend, up 6.1% YoY. Black Friday ($10.8 billion, up 9.9% YoY) and Thanksgiving Day ($6.1 billion, up 8.7% YoY) are both expected to outpace Cyber Monday in growth YoY, with consumers taking advantage of early deals promoted by U.S. retailers.

Strong discounts—as high as 30% off listed price—will drive shoppers to rush toward categories such as electronics, appliances and sporting goods, contributing over $2 billion in incremental spend this season. Against this backdrop, below, we highlight a few ETFs that are great bets in the current scenario.

Mobile Payments – ETFMG Prime Mobile Payments ETF (IPAY)

The 2024 holiday season is expected to be the most mobile of all time, with a record $128.1 billion spent through mobile devices at 53.2% share over desktop. This would also increase the usage of Buy Now, Pay Later services.

Retailers, of late, are offering customers flexibility in financing and shopping. Buy-Now-Pay-Later or Buy Online, Pick-Up in Store (BOPIS) are some of the offers in vogue. All these factors make IPAY a lucrative bet.

Video Game – Wedbush ETFMG Video Game Tech ETF ((GAMR - Free Report) )

Video games remain among one of the top toys’ categories for the holiday shopping season. Discounts for toys are set to touch 27% (vs. 28% in 2023), per Adobe. The underlying EEFund Video Game Tech Index of GAMR tracks companies actively involved in the electronic gaming industry, including the entertainment, education and simulation segments. The ETF charges 7 bps in fees.

Electronics – VanEck Semiconductor ETF ((SMH - Free Report) )

Consumers are binging on to buy electronics for gift purpose. Discounts for electronics are expected to peak at 30% off listed price (vs. 31% in 2023), per Adobe. Record high discounts are expected for TVs at 24% (vs. 23% in 2023). Discounts on appliances are set to stay at 18% (vs. 18% in 2023).

Semiconductors are the basic materials used in the present solid-state electronic devices. The underlying MVIS US Listed Semiconductor 25 Index tracks the overall performance of companies involved in semiconductor production and equipment.

Online Retail – Amplify Online Retail ETF ((IBUY - Free Report) )

Since online sales are predominant, the mention of an e-commerce ETF is a must.  Adobe expects U.S. online sales to hit $240.8 billion this holiday shopping season (Nov. 1 to Dec. 31), representing 8.4% growth year over year.

The fund tracks the EQM Online Retail Index, which is a globally diverse basket of publicly traded companies that obtain 70% or more revenues from online or virtual sales. No stock accounts for more than 2% of the fund.

Apparel – SPDR S&P Retail ETF ((XRT - Free Report) )

Discounts for apparel are expected to hit 23% (vs. 24% in 2023) while it is expected to be 20% (vs. 18% in 2023) for sporting goods. The ETF XRT has around 20% exposure to apparel stocks, making XRT an apt pick for Cyber Week.


 

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