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ETFs in Focus on Alibaba Fiscal Q1 2023 Earnings

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Chinese e-commerce giant Alibaba Group BABA reported first-quarter fiscal 2023 before the opening bell on Aug 4, where in it beat the Zacks Consensus Estimate for earnings. The company recorded flat revenue growth for the first time ever, as the country grappled with an economic slowdown and COVID-19 resurgences.

Driven by earnings beat, shares of Alibaba jumped as much 6% on the day but closed at up 1.8%, putting the ETFs with the largest allocation to the Chinese e-commerce giant in focus. These include ProShares Online Retail ETF ONLN, Invesco BLDRS Emerging Markets 50 ADR Index Fund ADRE, First Trust Dow Jones International Internet ETF FDNI, Global X Emerging Markets Internet & E-commerce ETF EWEB and SPDR S&P China ETF GXC.

Earnings of $1.75 per ADS surpassed the Zacks Consensus Estimate of 83 cents but declined 29% from the year-ago earnings. Revenues were flat year over year at $30.69 billion and fell short of the consensus mark of $31.15 billion. This marked an end to a decade of sizzling growth for China’s Internet giant. Notably, Chinese e-commerce giant has enjoyed double-digit revenue growth almost every quarter since it went public in 2014 (read: Should You Play Alibaba-Heavy ETFs Now?).

The slowdown was due to the pandemic-related supply-chain disruptions and logistics that has hurt the domestic e-commerce business. The company’s cloud computing and international e-commerce revenues grew 10% and 2%, year over year, respectively, while China’s e-commerce revenues dipped 1%.

ETFs in Focus

ProShares Online Retail ETF (ONLN)

ProShares Online Retail ETF offers exposure to companies that principally sell online or through other non-store channels, and then zeros in on the companies that reshape the retail space. It tracks the ProShares Online Retail Index, holding 38 stocks in its basket. Alibaba is the second firm accounting for 16.5% of the portfolio.

ProShares Online Retail ETF has amassed $282.4 million in its asset base and currently trades in a moderate volume of around 94,000 shares a day, on average. It charges 58 bps in annual fees from investors (read: Amazon Posts Q2 Losses, Shares Spikes: ETFs in Focus).

Invesco BLDRS Emerging Markets 50 ADR Index Fund (ADRE)
 
Invesco BLDRS Emerging Markets 50 ADR Index Fund offers exposure to 50 emerging market-based depositary receipts by tracking the S&P/BNY Mellon Emerging Markets 50 ADR Index. About 29% of the portfolio is allotted to Chinese firms, with Alibaba occupying the third position at 9.6%. Taiwan, India and Brazil round off the next three spots in terms of country exposure. Invesco BLDRS Emerging Markets 50 ADR Index Fund has the largest exposure in the information technology and financials sectors, with at least 22% share each, while consumer discretionary and materials round off the next two spots.

Invesco BLDRS Emerging Markets 50 ADR Index Fund has amassed $131.6 million in its asset base while trading in a lower volume of about 4,000 shares. ADRE charges 29 bps in fees per year and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.

First Trust Dow Jones International Internet ETF (FDNI)

First Trust Dow Jones International Internet ETF follows the Dow Jones International Internet Index, giving investors exposure to the 41 largest and most actively traded non-U.S. international companies in the Internet industry that are engaged in Internet commerce and Internet services. Alibaba occupies the second position at 8.4% of total assets.

First Trust Dow Jones International Internet ETF has AUM of $37.1 million and charges 65 bps in fees per year. It trades in an average daily volume of 13,000 shares (see: all the Technology ETFs here).

Global X Emerging Markets Internet & E-commerce ETF (EWEB)

Global X Emerging Markets Internet & E-commerce ETF seeks to invest in companies positioned to benefit from the increased adoption of Internet and E-commerce technologies in emerging markets. It tracks the Nasdaq CTA Emerging Markets Internet & E-commerce Net Total Return Index, holding 39 stocks in its basket. Out of these, Alibaba takes the third spot with 8.4% share. Consumer discretionary and consumer services are the top two sectors with 50.9% and 40.1%, respectively.

Global X Emerging Markets Internet & E-commerce ETF has accumulated $2.5 million in its asset base and trades in an average daily volume of 1,000 shares. It charges 65 bps in fees per year and has a has a Zacks ETF Rank #4 (Sell).

SPDR S&P China ETF (GXC)

SPDR S&P China ETF follows the S&P China BMI Index and seeks to provide exposure to the publicly traded companies domiciled in China that are available to foreign investors. It holds 873 stocks in its basket, with Alibaba taking the second spot at 7.4%. SPDR S&P China ETF has the largest allocation in consumer discretionary at 28%, while communication services and financials round off the next two spots.

SPDR S&P China ETF has amassed $1.4 billion in its asset base and sees an average daily volume of 107,000 shares. The fund charges investors 59 bps in annual points and has a Zacks ETF Rank #4 with a Medium risk outlook.


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SPDR S&P China ETF (GXC): ETF Research Reports
 
Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report
 
Invesco BLDRS Emerging Markets 50 ADR ETF (ADRE): ETF Research Reports
 
ProShares Online Retail ETF (ONLN): ETF Research Reports
 
First Trust Dow Jones International Internet ETF (FDNI): ETF Research Reports
 
Global X Emerging Markets Internet & Ecommerce ETF (EWEB): ETF Research Reports
 
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