The final quarter of the year is underway and all eyes must have turned toward retailers’ performance as the October-November period embraces the key holiday season. As loads of sales-boosting events like Halloween, Thanksgiving, Cyber Monday, Black Friday and Christmas fall in this quartile, the sector generally sees a sales boost (read: Build Your Portfolio With 4 ETFs in Q4).
According to a report by Forrester, U.S. online holiday sales will surge 12% to $129 billion in 2017 from $115 billion last year while brick-and mortar holiday sales will likely nudge up 0.3% to $549 billion.
What Are on the Top of Consumer Wishlist?
Electronics are likely to be the top 2017 Black Friday bargains, as per analysts. Salesforce expects Black Friday to be “the busiest digital shopping day” in the history of the United States, surpassing Cyber Monday, as the U.S. digital shopping day for the second consecutive year.
BestBlackFriday.com indicated that though Apple AAPL stores do not offer Black Friday sale, several other electronics retailers will keep Apple products in their deals. Digitimes noted that a lot of suppliers of the Apple wearable products are seeing strong growth prospects in Q4.
With the buying season on the threshold, several makers of streaming devices like Apple, Roku and Amazon AMZN have launched new models for customers who are keen on “adding streaming devices for secondary TVs.”
As a result, companies that make components for Apple products and other electronics should gain traction. Higher demand from emerging technology applications like tablets and smartphones and the need for mining soaring bitcoins are tailwinds to the semiconductor space. Taiwan Semiconductor Manufacturing Co. sees 11 to 12% increase in revenues in the holiday quarter, “when Apple’s much-anticipated iPhone X goes on sale”.
In any case, semiconductor companies like Nvidia NVDA has been on a tear lately. Goldman Sachs recently maintained its buy rating for Nvidia shares, believing that the company's products “will thrive in the machine learning markets.” Goldman also upped its price target for Nvidia to $217 from $193 (read: Play Nvidia's Surge With These ETFs).
If this was not enough, NPD Group analyst Mat Piscatella indicated that game sales are likely to see a “nice rebound this year” from last year's unsatisfactory numbers, thanks to a host of “hot titles and new consoles.”
ETFs to Consider
Given huge optimism, investors should consider the following ETFs that are dealing with electronic gadgets and can make the most of this holiday season (see: all the Technology ETFs here):
ETFMG Video Game Tech ETF GAMR
This ETF targets the global video game industry of the technology sector including game developers, console and chip manufacturers, and game retailers. The fund holds 45 securities in its basket with none holding more than 6% of the assets. American firms take the top spot at 38% while Japanese and South Korean firms round off the top three at 25% and 15%, respectively. While large cap accounts for 40% share, mid caps make up for 32% share and the rest goes to small caps. Expense ratio comes in at 0.75% (read: 5 Millennial Friendly ETF Investing Ideas).
iShares U.S. Technology ETF IYW
This ETF gives investors exposure to 142 stocks in the broad technology space. The fund has amassed more than $3.7 billion in AUM while charging 44 bps in fees and expense. Apple occupies the top position in the basket with 16.9% of assets. The product is heavily skewed toward Software & Services, which makes up for more than half of the portfolio. Tech Hardware & Equipment take the next spot. The fund has a Zacks ETF Rank of 1 or ‘Strong Buy’ with a ‘Med’ risk outlook (read: Why Cloud ETFs Could Soar Ahead).
VanEck Vectors Semiconductor ETF SMH
This is one of the popular and liquid ETFs in the semiconductor space with AUM of $1.1 billion. The fund provides exposure to 26 global securities. Taiwan Semiconductor accounts for about 10.2% of the fund followed by Intel (9.2%), Applied Materials (5.5%) and Nvidia (5.3%). While U.S. firms dominate the fund’s holdings with 78.4% assets, Taiwan (10.2%), the Netherlands (9.5%) and Bermuda (1.9%) round off the top four in terms of country exposure. The fund has an expense ratio of 0.36%. It has a Zacks Rank of 1 with a High-risk outlook (read: Bitcoin Update: Goldman Trading & ETF Filings).
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