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Amazon Prime Day Smashes Record: 5 ETF Deals

Sweta Killa

E-commerce behemoth Amazon AMZN once again smashed records with its annual Prime Day 2019 sales surpassing last year’s combined Black Friday and Cyber Monday sales.

A record number of Prime members shopped for more than 175 million products across 18 countries during the event, which extended for 48 hours this year compared with 36 hours in 2018 and 30 hours in 2017.  Coresight Research estimates that Amazon Prime Day could fetch about $5.8 billion in sales globally over the two days while JP Morgan predicts sales of $5 billion.

According to e-commerce research company Edison Trends, online shoppers spent more than 10 times on Amazon on the first day than they did on Walmart and eBay combined. Sales in the first 24 hours were up 53% compared with the same time frame last year.

The company claims this year was the "fastest Prime Day ever," meaning that it shipped more items through one- and same-day shipping. It sold over 100,000 laptops, 200,000 televisions, 300,000 headphones, 350,000 luxury beauty products and more than 1 million toys (read: Consumer ETFs Win on Prime Day Becoming "Summer's Black Friday).

The bestselling products were Amazon devices – Echo Dot, Fire TV Stick with Alexa Voice Remote, and Fire TV Stick 4K with Alexa Voice Remote. Fire tablets also saw the best day sales with Fire 7 tablet being the top seller. The other hot products were iRobot Roomba 690 Robot Vacuum, MyQ Smart Garage Door Opener Chamberlain MYQ-G0301 and Amazon Smart Plug.

Given the Prime Day sales surge, investors could easily tap some ETFs in a basket form. Below, we have highlighted five ETFs that have at least 20% allocation to this Internet giant and could make for compelling plays heading into the company’s Q2 earnings (expected to release on Jul 25):

Fidelity MSCI Consumer Discretionary Index ETF FDIS

This fund tracks the MSCI USA IMI Consumer Discretionary Index, holding 296 stocks in its basket. Of these, AMZN takes the top spot with 25.8% share. Internet & direct marketing retail makes up for the top sector with 32.1% share, followed by specialty retail (21.2%) and hotels restaurants & leisure (19.8%). The product has amassed $726.4 million in its asset base while trades in a good volume of around 114,000 shares a day on average. It charges 8 bps in annual fees from investors and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: all the Consumer Discretionary ETFs here).

ProShares Online Retail ETF ONLN

This is the first ETF focused exclusively on retailers that principally sell online. It follows the ProShares Online Retail Index, holding 25 stocks in its basket. Amazon is the top firm accounting for about 23.7% of the portfolio. The product has amassed $23.9 million in its asset base and trades in a paltry volume of around 17,000 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 $14.6 billion and average daily volume of around 4.5 million shares. Holding 63 securities in its basket, Amazon takes the top spot with 23.5% 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 with a Medium risk outlook (read: ETF Asset Flow of Last Week: S&P 500 Tops).

Vanguard Consumer Discretionary ETF VCR

This fund follows the MSCI U.S. Investable Market Consumer Discretionary 25/50 Index and holds 304 stocks in its basket. Of these, Amazon occupies the top position with 22.4% allocation. Internet & direct marketing retail takes the largest share at 29.1% 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 85,000 shares a day. The product has about $3.2 billion in its asset base and a Zacks ETF Rank #3 (Hold) 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 20.1% share. The ETF has a certain tilt toward specialty retail, which accounts for 32% of the portfolio, while Internet & direct marketing retail (23%), hypermarkets (15%) and department stores (11%) round off the next two spots. The product has amassed $65.4 million in its asset base and charges 35 bps in annual fees. Volume is light as it exchanges nearly 13,000 shares per day. RTH has a Zacks ETF Rank #2 with a Medium risk outlook (read: Retail ETF Hits New 52-Week High).

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