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Amazon Prime Day Hits Record: 5 Best ETF Deals

The online e-commerce behemoth Amazon AMZN once again crossed $1,000 per share, thanks to the record third annual Prime Day 2017. The 30-hour event turned to be a blockbuster, marking the biggest shopping day in the company’s history, surpassing Black Friday and Cyber Monday sales.

As a record number of Prime members shopped across 13 countries, Prime Day sales jumped 60% year over year. Tens of millions of Prime members purchased items during the shopping event, up 50% from Prime Day 2016. The bestselling product of the Prime Day was Echo Dot, Amazon’s mini Alexa-enabled smart speaker, which was discounted by 30% to a price of $35 (from $50). The classic Echo smart speaker, Fire Tablets, Kindles, the Element 55-inch Ultra HD Smart LED TV also saw record sales.

The other hot items were the InstantPot programmable pressure cooker, 23andMe DNA ancestry tests, Sony Playstation 4s, the Nintendo Switch, Alexa-enabled smart plugs, Whey protein powder and "Game of Thrones" seasons 1 through 6 on Blu-Ray (read: Tech Face Off: Amazon Versus Alphabet ETFs).

A large number of new members also joined Prime on July 11 than on any single day in Amazon’s history. Notably, Prime Day has become an effective way to promote Amazon’s Prime subscription service, which costs $99 a year or $10.99 a month and includes perquisites like free, two-day shipping and access to Prime Video and Prime Music.

Given the record Prime Day sales, Amazon shares popped up 1.2% on the day and investors could easily tap the surge in a basket form. Below are five ETFs with the double-digit allocation to this Internet giant that could make for a compelling play in the months ahead. All of these have a favorable Zacks ETF Rank of 1 (Strong Buy), 2 (Buy) or 3 (Hold), suggesting continued upside:

VanEck Vectors Retail ETF RTH

This fund provides exposure to the 26 largest retail firms by tracking the MVIS US Listed Retail 25 Index. Of these, AMZN takes the top position in the basket with 19.8% share. The ETF has a certain tilt toward specialty retail and internet direct marketing, which accounts for one-fourth of the portfolio each, while healthcare services (11%), and drug stores (10%) round off the next two spots. The product has amassed $65.9 million in its asset base and charges 35 bps in annual fees. Volume is light as it exchanges nearly 20,000 shares per day. RTH has a Zacks ETF Rank of 1 with a Medium risk outlook (read: Amazon's Foray Into Grocery to Hurt/Help These Stocks & ETFs).

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 the most popular product in this space with AUM of nearly $12.2 billion and average daily volume of around 4.2 million shares. Holding 87 securities in its basket, Amazon takes the top spot with 15.5% of assets. Media dominates about one-fourth of the portfolio while internet direct marketing, specialty retail, and hotels restaurants and leisure round off the next three spots with a double-digit allocation each. The fund charges 0.14% in expense ratio and has a Zacks ETF Rank of 3 with a Medium risk outlook.

iShares U.S. Consumer Services ETF IYC

This ETF provides targeted exposure to domestic consumer services’ stocks by tracking the Dow Jones U.S. Consumer Services Index. It holds 184 stocks in its basket with Amazon being the top firm holding 12.7% share. In terms of industrial exposure, retailing makes up the largest share with 37.2%, followed by media (23.5%), consumer services (16.9%), and foods & staples retailing (12.5%). The fund has amassed $874.6 million in its asset base while trades in moderate volumes of 56,000 shares a day on average. It charges 44 bps in annual fees from investors and has a Zacks ETF Rank of 3 with a Medium risk outlook.

Fidelity MSCI Consumer Discretionary Index ETF FDIS

This fund tracks the MSCI USA IMI Consumer Discretionary Index, holding 365 stocks in its basket. Of these, AMZN takes the top spot with 12.6% share. Media makes up for the top sector with 23.7% share, followed by internet & direct marketing retail (19.3%), hotels restaurants & leisure (16.3%) and specialty retail (16.2%). The product has amassed $302 million in its asset base while trades in a moderate volume of around 70,000 shares a day on average. It charges 8 bps in annual fees from investors and has a Zacks ETF Rank of 3 with a Medium risk outlook (read: all the Consumer Discretionary ETFs here).

Vanguard Consumer Discretionary ETF VCR

This fund follows the MSCI U.S. Investable Market Consumer Discretionary 25/50 Index and holds 379 stocks in its basket. Out of these, Amazon occupies the top position at 12.4% allocation. Internet & direct marketing retail, cable & satellite, and restaurants are the top three sectors accounting for a double-digit exposure each. VCR charges investors 10 bps in annual fees while volume is moderate at nearly 80,000 shares a day. The product has managed about $2.2 billion in its asset base and has a Zacks ETF Rank of 3 with a Medium risk outlook.

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Amazon.com, Inc. (AMZN): Free Stock Analysis Report
 
VANECK-RETAIL (RTH): ETF Research Reports
 
SPDR-CONS DISCR (XLY): ETF Research Reports
 
VIPERS-CONS DIS (VCR): ETF Research Reports
 
FID-CON DIS (FDIS): ETF Research Reports
 
ISHARS-US CN CY (IYC): ETF Research Reports
 
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