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ETFs & Stocks to Roar Higher on Record Online Spending

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The holiday season, no doubt, has turned into a digital shopping spree with a massive splurge on online sales. After hitting a sales record of $3.34 billion on Black Friday, Cyber Monday saw another record in online sales of $3.45 billion, up 12.1% from last year as per Adobe Digital Insights. Notably, mobile devices have been the biggest drivers of growth topping $1.07 billion, up 34% from last year and accounting for 31% of total sales (read: Hot Stock & ETF Deals for Cyber Monday).

While web analytics firm ComScore has not yet disclosed the figures for online shopping on tablets or smartphones, desktop online sales climbed 17% year over year to $2.67 billion. Apparel & Accessories topped the product category with more than $600 million in desktop sales, followed by consumer electronics and computer hardware.
Most of the e-commerce retail providers have benefited from rising sales with AMZN topping the list. About 130 million Americans visited Amazon on Cyber Monday using a desktop computer, smartphone or tablet. Other online retailers such as eBay EBAY, Wal-Mart WMT, Kohl’s KSS and Target (TGT - Free Report) also emerged as big winners on Cyber Monday.

Overall, the holiday season started with a big bang. While in-store purchases are losing steam with the advent of new technologies and increasing consumer expectations, online sales are growing by leaps and bounds. Retail e-commerce spending from desktop computers between November 1 and November 28 climbed 12% to $29.7 billion. The trend is likely to continue for the rest of the holiday season.

This is especially true as online holiday sales are expected to increase 7–10% to as much as $117 billion in November and December as per the National Retail Federation (NRF) while eMarketer projects digital sales to hit $94.71 billion, up 17.2% from last year. Additionally, Forrester predicts online sales to jump 13% from last year to $112 billion (read: 4 Reasons to Buy Retail ETFs This Holiday Season).

Given this, several e-commerce ETFs and stocks are poised to surge this holiday season owing to strong online shopping. Below we have highlighted some of these:


Apart from online retail ETFs that investors can ride on, a few funds having exposure to traditional brick-and-mortar retailers will also see significant upside given that they have increased their online platforms.

Amplify Online Retail ETF IBUY

This ETF debuted in the space seven months ago and has already attracted $5.6 million to its asset base. It offers global exposure to companies that derive 70% or more revenue from online and virtual retail by tracking the EQM Online Retail Index. The fund is home to 43 stocks that are widely diversified, with each holding no more than 3.6% of assets. The product charges 65 bps in fees per year and added 1% over the past one month.


This product tracks the S&P Retail Select Industry Index, holding 98 securities in its basket with none accounting for more than 1.5% of assets. Apparel retail takes the top spot at one-fourth share while specialty stores, automotive retail, and Internet retail round off the next three spots with a double-digit allocation each. The fund has amassed $630 million in its asset base and charges 35 bps in annual fees. The fund surged nearly 8.2% over the past one-month period and has a Zacks ETF Rank of 1 or ‘Strong Buy’ with a Medium risk outlook (read: Retail ETF Hits New 52-Week High).

First Trust Nasdaq Retail ETF FTXD

The fund follows the Nasdaq US Smart Retail Index and holds 49 stocks in its basket. It is moderately concentrated on components, with each firm holding less than 8.3% of assets. While specialty retailers and apparel retailers make up for a bigger chunk at 30.8% and 25.8%, respectively, broadline retailers, and food retailers & wholesalers round off the next two spots. FTXD has accumulated $2.1 million within two months of its debut and has an expense ratio of 0.60%. The ETF gained 5.5% over the past one month.


We highlight three Internet e-commerce picks with a top Zacks Rank #1 (Strong Buy) or 2 (Buy) with a Momentum Style Score of B or better that are likely to see immense price appreciation resulting from the surge in online shopping. International Ltd. CTRP

Based in Shanghai, the People’s Republic of China, is a leading travel service provider of hotel accommodations, airline tickets and packaged-tours in China. The stock has seen the Zacks Consensus Estimate rising by a penny for the holiday quarter over the past 30 days. It has a Zacks Rank #2 with a Momentum Style Score of A. Inc. STMP

Based in El Segundo, California, is a leading provider of Internet-based postage services for mailing or shipping letters, packages or parcels anywhere and anytime in the U.S. It has seen solid earnings estimate revision of 37 cents for the current holiday quarter over the past month. The stock has a Zacks Rank #1 with a Momentum Style Score of B (read: Top-Ranked ETFs & Stocks Soaring to All-Time Highs).

Mercadolibre, Inc. MELI

Based in Vicente López, Argentina, MercadoLibre is the largest online trading platform in Latin America and the market leaders in e-commerce in Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, Peru, Uruguay and Venezuela, based on unique visitors and page views. The stock has seen the Zacks Consensus Estimate rising from 85 cents to 91 cents for the holiday quarter over the past 30 days. MELI has a Zacks Rank #1 with a Momentum Style Score of A.

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