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ETFs to Tap on Amazon's Record Holiday Sales

E-commerce behemoth Amazon AMZN smashed records this holiday season with "billions of items" purchased in the period from Thanksgiving to Christmas.

More than 5 million new customers started Prime free trials or paid memberships globally and the number of items that were delivered with one-day or same-day shipping quadrupled compared to the last holiday season. Third-party sellers saw double-digit growth from the year ago level, selling more than 1 billion items.

The top selling product was Amazon devices including Echo Dot, Fire TV Stick with Alexa Voice Remote, and Echo Show 5 and the top-selling categories were toys and games, fashion, home, and beauty.

Per MasterCard Advisors' SpendingPulse, e-commerce sales surged 18.8% year over year this holiday season and represented about 14.6% of total retail sales. The growth is more than five times greater than overall holiday sales growth of 3.4% (read: Consumer ETFs & Stocks Surging on Strong Holiday Season).

Given the record-breaking Christmas holiday sales, investors could easily tap the opportune moment with some ETFs. Below, we have highlighted five ETFs that have at least 20% allocation to this Internet giant and could make for compelling plays heading into 2020:

Fidelity MSCI Consumer Discretionary Index ETF FDIS

This fund tracks the MSCI USA IMI Consumer Discretionary Index, holding 285 stocks in its basket. Of these, AMZN takes the top spot with 24.1% share. Internet & direct marketing retail makes up for the top sector with 29.7% share, followed by specialty retail (21.6%) and hotels restaurants & leisure (19%). The product has amassed $793.9 million in its asset base while trading in a good volume of around 74,000 shares a day on average. It charges 8 bps in annual fees from investors and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: all the Consumer Discretionary ETFs here).

ProShares Online Retail ETF ONLN

This ETF focuses on global retailers that derive significant revenues from online sales. It tracks the ProShares Online Retail Index, holding 24 stocks in its basket with Amazon as the top firm at 24% allocation. The product has amassed $28.2 million in its asset base and trades in paltry volume of around 12,000 shares a day on average. It charges 58 bps in annual fees from investors.

Consumer Discretionary Select Sector SPDR Fund XLY

This product offers exposure to the broad consumer discretionary space by tracking the Consumer Discretionary Select Sector Index. It is the largest and most-popular product in this space with AUM of nearly $14.4 billion and average daily volume of around 3.3 million shares. Holding 64 securities in its basket, Amazon takes the top spot with 23.8% of assets. Internet & direct marketing retail dominates 29.1% of the portfolio while specialty retail, and hotels restaurants and leisure round off the next two spots with a double-digit allocation each. The fund charges 0.13% in expense ratio and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: A Look Back At S&P 500 Sector ETFs in 2019).

Vanguard Consumer Discretionary ETF VCR

This fund follows the MSCI U.S. Investable Market Consumer Discretionary 25/50 Index and holds 298 stocks in its basket. Of these, Amazon occupies the top position with 22.8% allocation. Internet & direct marketing retail takes the largest share at 28.6% of assets, while restaurants and home improvement retail round off the top three sectors. VCR charges investors 10 bps in annual fees, while volume is moderate at nearly 60,000 shares a day. The product has about $3.1 billion in its asset base and a Zacks ETF Rank #2 with a Medium risk outlook.

VanEck Vectors Retail ETF RTH

This fund provides exposure to the 25 largest retail firms by tracking the MVIS US Listed Retail 25 Index. Of these, AMZN takes the top position in the basket with 19.3% share. The ETF has a certain tilt toward specialty retail, which accounts for 31% of the portfolio, while Internet & direct marketing retail (24%), hypermarkets (14%) and department stores (10%) round off the next spots. The product has amassed $105.3 million in its asset base and charges 35 bps in annual fees. Volume is light as it exchanges nearly 11,000 shares per day. RTH has a Zacks ETF Rank #3 with a Medium risk outlook (read: Make the Most of this Holiday Season With These ETFs).

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Amazon.com, Inc. (AMZN): Free Stock Analysis Report
 
Vanguard Consumer Discretionary ETF (VCR): ETF Research Reports
 
VanEck Vectors Retail ETF (RTH): ETF Research Reports
 
Consumer Discretionary Select Sector SPDR Fund (XLY): ETF Research Reports
 
Fidelity MSCI Consumer Discretionary Index ETF (FDIS): ETF Research Reports
 
ProShares Online Retail ETF (ONLN): ETF Research Reports
 
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