Back to top

ETFs to Tap Amazon's Growth and Expansion Story

Read MoreHide Full Article

Amazon (AMZN - Free Report) has gained nearly 64% year to date in comparison with the S&P 500, which has gained 8.8%. On Sep 4, it became the second company to reach the trillion-dollar feat after Apple (AAPL) (read: Amazon Hits Trillion Dollar Market Cap: ETFs to Buy).

Amazon has miles to go with the recent developments taking place.

Plan of Opening 3000 Cashierless Stores by 2021

Amazon is planning to expand its cashierless AmazonGo stores chain to 3000 by 2021. Per a report by Bloomberg, it plans to have 10 such stores by the end of this year, another 50 stores in major cities like San Francisco and New York by 2019. The target market is the affluent urban section of the society.

At present, there are three stores in Seattle, the company’s headquarters and another one was opened in Chicago on Sep 17. This would help it become one of the biggest convenience store-chains in the country (read: FAANG ETFs Face Off Amid New Tariffs: Apple Vs. Amazon).

Launch of Alexa-Voiced Assisted Equipment

Post success of its echo smart speakers, Amazon will be launching eight new voice controlled devices by this year. These include microwave owen, amplifier, sub-woofer and in-car gadget. A teaser of the same could be displayed by the end of this month.

Collaboration With Audi

Audi is planning to team up with Amazon to deliver in-home charging equipment for the U.S. consumers for its E-tron, the first of the three fully electric vehicles Audi plans to bring to the market by 2020. Audi expects nearly 30% of U.S. consumers to own an electric vehicle by 2025.

Becoming the Third-Largest Digital Ad-platform in U.S.

All of Amazon’s advertising platforms have come under a single name Amazon Advertising banner. It is aimed at becoming a one–stop shop for ads on and off Amazon. It includes Sponsored Ads, Display Ads, Video Ads, and Stores, Measurement across Amazon and on third-party sites and apps and Amazon Demand-Side Platform (DSP).

Amazon is the third-largest digital ad-platform in the United States. The company will pull in $4.61 billion of U.S. digital ad revenues this year, which accounts for 4.15% of the U.S. digital ad market. Per eMarketer, one of the drivers for Amazon’s growth is that advertisers are willing to run ads on platforms that are solely dedicated for the purpose of shopping.

Amazon business is far from affecting a duopoly held by Google and Microsoft, which account for 58% of the entire domestic online market.“But Amazon has the ingredients for a truly powerhouse digital ad business, the key to which is doing more than just selling ad impressions,” the firm said.

Success at 70th Emmy Awards

Amazon’s Prime Video original program “The Marvelous Mrs. Maisel” had five major wins in the comedy category, which included Best Comedy and Best Actress, Comedy.

ETFs to Tap

Recent news surrounding the company indicates that the bull run will continue. The following are six ETFs that provide more than 20% allocation to Amazon: (see: all Consumer Discretionary ETFs)

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

It tracks the Consumer Discretionary Select Sector Index. There are 80 holdings in the fund pool and Amazo sits at the top with 24.4% weight. AUM is $15.87 billion and expense ratio charged is 0.13%. The fund carries a Zacks ETF Rank #2 (Buy), with a Medium risk outlook.

ProShares Online Retail ETF (ONLN - Free Report)

It tracks the Consumer Discretionary Select Sector Index. There are 22 holdings in the fund pool and Amazon sits at the top with 24.2% weight. AUM is $22.9 million and expense ratio charged is 0.58%.

Vanguard Consumer Discretionary ETF (VCR - Free Report)

It tracks the MSCI US Investable Market Consumer Discretionary 25/50 Index. There are 328 holdings in the fund pool and Amazon tops with  23.1% allocation. AUM is $3.2 billion and expense ratio is 0.10%. This ETF has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.

iShares U.S. Consumer Services ETF (IYC - Free Report)

It tracks the Dow Jones U.S. Consumer Services Index. There are 160 holdings in the fund pool and Amazon is at the top with 21.2%. AUM is $965.3 million and expense ratio is 0.43%. It carries a Zacks ETF Rank #2 with a Medium risk outlook.

VanEck Vectors Retail ETF (RTH - Free Report)

It tracks the MVIS US Listed Retail 25 Index. There are 25 holdings and Amazon tops with a weight of 21.46%. AUM is $118.5 million and expense ratio is 0.35%.The fund has a Zacks ETF Rank #3 with a Medium risk outlook.

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

It tracks the MSCI USA IMI Consumer Discretionary Index. There are 338 holdings in the fund pool and Amazon is at the top with a weight of 20.5%. AUM is $697.3 million and expense ratio is 0.08%. It has Zacks ETF Rank #2 with a Medium risk outlook.

Want key ETF info delivered straight to your inbox?

Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>
 



More from Zacks ETF News And Commentary

You May Like