Published on 4 Feb 2023 on Zacks via Yahoo Finance

ETFs in Focus Posts Amazon's Biggest Annual Loss Ever

After the closing bell on Thursday, Amazon AMZN disappointed investors following its fourth-quarter results. Though the e-commerce giant beat earnings and revenue estimates, it posted the least profitable holiday quarter since 2014 and the biggest-ever annual loss as a public company.Shares of AMZN dropped 5.1% in aftermarket hours on elevated volume. This has put focus on ETFs with a substantial allocation to this online behemoth. These include ProShares Online Retail ETF ONLN, Fidelity MSCI Consumer Discretionary Index ETF FDIS, Vanguard Consumer Discretionary ETF VCR, Consumer Discretionary Select Sector SPDR Fund XLY and VanEck Vectors Retail ETF RTH.Amazon reported earnings per share of 21 cents, outpacing the Zacks Consensus Estimate of 15 cents but declining from the year-ago earnings of $1.39. Revenues grew 9% year over year to $149.2 billion and edged past the consensus estimate of $145.5 billion. Amazon’s cloud computing business — Amazon Web Services — continued to shine, with revenues surging 20% year over year to $21.4 billion.The e-commerce giant had a record-breaking holiday season, with customers purchasing nearly half a billion items from small businesses in the United States. Small businesses in the United States generated more than $1 billion in sales over the five-day (Thanksgiving- Cyber-Monday) holiday shopping period (read: Online Holiday Sales Hit Record High: 5 ETFs to Tap).The world's largest online retailer expects revenues in the range of $121-126 billion for the first quarter of 2023, suggesting 4-8% growth from the year-ago reported number.

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 27 stocks in its basket. Amazon is the top firm, accounting for 25% of the portfolio (read: 5 Sector ETFs That Beat the Market in January).ProShares Online Retail ETF has amassed $169.5 million in its asset base and currently trades in a moderate volume of around 75,000 shares a day, on average. It charges 58 bps in annual fees from investors.Fidelity MSCI Consumer Discretionary Index ETF (FDIS)Fidelity MSCI Consumer Discretionary Index ETF tracks the MSCI USA IMI Consumer Discretionary Index, holding 313 stocks in its basket. Of these, Amazon takes the top spot with a 19.9% share.Fidelity MSCI Consumer Discretionary Index ETF has amassed $1 billion in its asset base while trading in a good volume of around 80,000 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.Vanguard Consumer Discretionary ETF (VCR)Vanguard Consumer Discretionary ETF currently follows the MSCI US Investable Market Consumer Discretionary 25/50 Index and holds 314 stocks in its basket. Of these, Amazon occupies the top position, with a 19.9% allocation. Internet & direct marketing retail takes the largest share at 22.5%, while restaurants, home improvement retail, and automobile manufacturers and round off the next three spots.VCR charges investors 10 bps in annual fees, while volume is moderate at nearly 121,000 shares a day. The product has managed about $4.1 billion in its asset base and carries a Zacks ETF Rank #2 with a Medium risk outlook.Consumer Discretionary Select Sector SPDR Fund (XLY)Consumer Discretionary Select Sector SPDR Fund offers exposure to the broad consumer discretionary space by tracking the Consumer Discretionary Select Sector Index. Holding 56 securities in its basket, Amazon takes the top spot with 24.8% of assets. Internet & direct marketing retail dominates about 26% of the portfolio, while specialty retail, hotels, restaurants and leisure, and automobiles round off the next three spots with a double-digit allocation each.Consumer Discretionary Select Sector SPDR Fund is the largest and most popular product in this space, with AUM of $14.5 billion and an average daily volume of around 4 million shares. It charges 0.10% in expense ratio and has a Zacks ETF Rank #2 with a Medium risk outlook (read: 4 ETFs to Tap on Solid Q4 GDP Numbers).VanEck Vectors Retail ETF (RTH)VanEck Vectors Retail ETF provides exposure to the 25 largest retail firms by tracking the MVIS US Listed Retail 25 Index, which measures the performance of the companies involved in retail distribution, wholesalers, online, direct mail and TV retailers, multi-line retailers, specialty retailers and food and other staples retailers. Amazon takes the top position in the basket with a 19.8% share.VanEck Vectors Retail ETF has amassed $156 million in its asset base and charges 35 bps in annual fees. It trades in a lower volume of 7,000 shares a day on average. VanEck Vectors Retail ETF has a Zacks ETF Rank #2 with a Medium risk outlook.