5 ETFs That Will Profit from Amazon Prime Day

Online e-commerce giant Amazon kicked off its most anticipated two-day Prime Day event. Prime Day sales jumped nearly 12% year-over-year in the first seven hours, according to data from Momentum Commerce.

According to Numerator, the average household spent about $100 on Prime Day purchases as of noon New York time on July 16. The top-selling products were protein shakes, an Amazon Fire TV streaming device, sunscreen and Amazon’s Happy Belly brand groceries.

Investors can take advantage of the opportunity, as ETFs have double-digit allocations to the internet giant. These include ProShares Online Retail ETF (NYSE:ONLN), Fidelity MSCI Consumer Discretionary Index ETF (NYSE:FDIS), Vanguard Consumer Discretionary ETF (NYSE:VCR), Consumer Discretionary Sector SPDR Fund (NYSE:XLY) and VanEck Vectors Retail ETF (NASDAQ:RTH).

The 48-hour event is expected to generate $14 billion in online sales, up 10.5% from last year, according to Adobe. Shoppers are expected to spend $7.1 billion on Amazon on Tuesday alone, up 11.3% from last year. The second day is expected to generate $6.9 billion in online sales, up 9.2% year over year. Electronics are expected to see the biggest discount, at 22%, followed by 20% on apparel, 17% on housewares and furniture, and 11% on sporting goods.

ETFs in the spotlight

ProShares Online Retail ETF

ProShares Online Retail ETF offers exposure to companies that primarily sell online or through other non-store channels, and then focuses on companies that are reshaping the retail space. It tracks the ProShares Online Retail Index, with 18 stocks in its basket. Amazon is the largest company, accounting for 23.4% of the portfolio. ProShares Online Retail ETF has amassed $101.8 million in its asset base and charges 58 basis points in annual fees to investors.

Fidelity MSCI Consumer Discretionary Index ETF

Fidelity MSCI Consumer Discretionary Index ETF tracks MSCI USA IMI Consumer Discretionary Index, having 274 stocks in its basket. Of these, Amazon holds the top spot with a 23.3% share. Fidelity MSCI Consumer Discretionary Index ETF has accumulated $1.5 billion in its asset base and charges 8 basis points in annual fees from investors. It has a Zacks ETF Rank #3 (Hold) with a medium risk outlook.

Vanguard Consumer Discretionary ETF

Vanguard Consumer Discretionary ETF currently tracks the MSCI US Investable Market Consumer Discretionary 25/50 Index and has 304 stocks in its basket. Of these, Amazon holds the highest position with an allocation of 23.4%. Broadline Retail has the largest share at 25.5%, while automakers, restaurants, and home goods retail close the next three spots. VCR charges investors 10 basis points in annual fees. The product has managed $5.7 billion in its asset base and has a Zacks ETF Rank #3 with a medium risk outlook.

Consumer Discretionary Sector SPDR Fund

The Consumer Discretionary Select Sector SPDR Fund 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 almost $20 billion in AUM and average daily volume of 2.7 million shares. With 52 securities in its basket, Amazon ranks first with 22.5% of assets. Broadband retail, specialty retail, hotels, restaurants and entertainment, and autos are the four major sectors with double-digit exposure each. The Consumer Discretionary Select Sector SPDR Fund charges a 0.09% expense ratio and has a Zacks ETF Rank #3 with a medium risk outlook.

VanEck Vectors Retail ETF

VanEck Vectors Retail ETF provides exposure to 26 of the largest retail companies by tracking the MVIS US Listed Retail 25 Index, which measures the performance of companies involved in retail distribution, wholesale, online, direct and television shipping, general merchandise, specialty retailers, and food and other consumer staples retailers. Amazon is the largest in the basket with a 20.4% share. VanEck Vectors Retail ETF has accumulated $213 million in its asset base and charges 35 basis points in annual fees. It averages 5,000 shares per day and has a Zacks ETF Rank #2 (Buy) with a medium risk outlook.

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