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ETFs for Making an Online Retail Play

By  +Follow December 5, 2013 12:53PM
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The data’s back and Cyber Monday was the biggest online shopping day in history. Again. In a continuation of a trend that shocks almost exactly no one anymore (unless you’re one of the poor saps who’s held a long position on JC Penney (JCP) over the last couple years), online retail continues to grow at a fairly explosive rate.

Online sales were up 20.6 percent, year-over-year, from 2012’s Cyber Monday according to IBM’s (IBM) Digital Analytics. Adobe (ADBE) , meanwhile, only reported a 16 percent increase, according to their data, but clocked $2.29 billion in total sales. That’s dwarfed by the $12.3 billion in sales at brick and mortar retailers on Black Friday and Thanksgiving, but the trend of online retailers claiming an ever bigger piece of the pie appears to be here to stay.

So, maybe you’re on board with believing that Amazon’s (AMZN) plans for world domination are legit. Or, maybe you think the fervor over the growth in online sales has led to those stocks being severely overvalued and on course for a major correction. However you see the market playing out, one has ample reason to look for ETFs that will provide an investor a chance to make their particular online retail play.

There is not currently an ETF dedicated to online retailers like the SPDR S&P Retail ETF ($XRT) tracks traditional retailers. However, for those willing to get creative, there are a few ETFs one can use to make place a bet on the health of the online retail segment.

SPDR S&P Retail ETF ($XRT)

While this ETF is specific to traditional retailers, it’s worth noting that online sales aren’t limited to just Amazon, EBay (EBAY) , and other dedicated online retailers. Most traditional brick-and-mortar stores are actively building out their online capacity, and it’s not hard to make the argument that investing in those companies will gradually evolve into an investment in online retail at a rate consistent with that of the market. What’s more, the piece of the online pie that’s there doesn’t come at the price of completely eschewing the rest of the retail industry.

Market Vectors Retail ETF ($RTH)

If you’re a fan of the argument for XRT, though, the Market Vectors Retail ETF is potentially a superior blend. The RTH includes major retailers like Wal-Mart (WMT) , Home Depot (HD) , and CVS Caremark (CVS) among its five biggest holdings. However, it also features Amazon as its single biggest holding at 9.55 percent of its portfolio. Again, this is a blend that should capture a big piece of both the brick-and-mortar and online retail pie.

First Trust Dow Jones Internet Index Fund ($FDN)

However, many investors may not want any part of the traditional retail stocks. If you’re really intent and making a more specific and targeted play with online retail and staying away from any ailing brick-and-mortar dinosaurs, one option could be the First Trust Dow Jones Internet Fund. Based on the Dow Jones Internet Index, all of the companies that receive at least half of their annual sales/revenue from the internet.

This may keep things strictly online, but it also means that it’s no longer strictly retailers, too. Amazon is the second largest holding, but Google (GOOG) is the biggest at 11.18 percent and Facebook (FB) is the third largest with 6.45 percent of the portfolio.

Internet HOLDRS ($HHH)

So, if one really wants to get more specific, the Internet HOLDRS ETF may be the way to go. Like other HOLDRS funds, it’s much smaller, featuring only 12 stocks and not tracking a specific index as a benchmark. Amazon makes up 43.03 percent of the fund, and EBay is another 22.83 percent.

Just Buy (or Short) Amazon

Of course, once you’re talking about an ETF with no index and only 12 holdings, with two stocks making up 65 percent of the portfolio, it starts to become unclear why one’s looking for ETFs at all. Online is still a fairly narrow industry, with only a handful of major players that are publicly traded. While clearly much riskier than an ETF, anyone really intent on making a specific play on online retail may be best served by taking long or short positions with Amazon or EBay.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


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Results for amzn
Diego D'Aquilio
1 Nov 14 02:21:38
#Amazon $AMZN Joins #Google $GOOG and #Facebook $FB in Exposing Tech’s Gender Gap http://t.co/y2K7eIq4EH
Manic Waterfly
1 Nov 14 02:13:37
RT @bored2tears: Amazon's #cloud dominance under threat from Google: analyst. http://t.co/8AAXwVZ8RS $AMZN +1.32% at 303.02 premarket $GOOGL
Carolyn B Miciano
1 Nov 14 02:12:12
Guide to Option Spreads http://t.co/K3CmFY9Ft9 $AMZN $FB $TWTR
†Pls Justin♡
1 Nov 14 02:06:09
RT @danprimack: Can you legally yell 'Fire' in a crowded $AMZN store?
HotKeyTrading
1 Nov 14 02:00:03
Coverage Initiated: $ACI $KATE $SWN $WLP $CDR $MYCC $ZAYO $VVTV $KITE $FMSA $DERM $HSNI $VSLR $W $AMZN http://t.co/Vv2VEn80mr #stockpicks
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1 Nov 14 01:37:36
RT @MarketSmith: Jack vs Jeff: The two biggest ecommerce billionaires in the world are total opposites: https://t.co/7DBg6J29P0 $BABA $AMZN
Aaron Joshua Russell
1 Nov 14 01:14:27
RT @ForbesTech: The drop in Amazon's stock price knocked $2 billion off Jeff Bezos' fortune: http://t.co/JO0pxVGgot $AMZN http://t.co/HJGNR…
Ashley Gammie
1 Nov 14 00:26:14
Expected a tech selloff for stocks that earnings don't stack up.. Called $AMZN top & got abuse for it.. BUT buy the earning tech companies!!
HotKeyTrading
31 Oct 14 23:30:04
Unusual Options Activity: Puts: $EXPE $SBUX $USO $BIDU $COH $FSLR $WYNN $TNA $TWTR $COP $AMZN $GILD $MMM $UPS $YELP http://t.co/XQITF0lRKD
Dan
31 Oct 14 20:46:07
$AMZN OI for maturity 10/31/2014. 300.00 Highest put. 340.00 Highest call. http://t.co/v9fBCgriKv
victor /BLOCK
31 Oct 14 20:32:24
RT @danprimack: Can you legally yell 'Fire' in a crowded $AMZN store?
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31 Oct 14 20:31:31
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Michael J. Nunes
31 Oct 14 19:03:44
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31 Oct 14 18:44:05
Bad move $SBUX to deliver coffee its equivalent to $AMZN making a phone in hopes of gaining more traffic. Just sell more Keurig $GMCR
Thomas Paul
31 Oct 14 18:25:29
RT @harmongreg: The Opportunities in the Market the Last 2 Weeks - Dragonfly Capital http://t.co/UfORv2Jfd4 $FB $AMZN $SBUX and more plus l…
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31 Oct 14 18:15:26
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Greg Harmon, CMT
31 Oct 14 17:57:05
The Opportunities in the Market the Last 2 Weeks - Dragonfly Capital http://t.co/UfORv2Jfd4 $FB $AMZN $SBUX and more plus last day of sale
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31 Oct 14 17:20:32
RT @danprimack: Can you legally yell 'Fire' in a crowded $AMZN store?
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31 Oct 14 17:00:22
RT @IPOtweet: Vive le online shopping: Cnova sets terms for $355 million IPO $CNV $BABA $AMZN $IPO #IPO http://t.co/VdvXSmanxf
Alex Lee
31 Oct 14 16:51:48
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MarketStream.TV
31 Oct 14 16:25:26
RT @TheOptionDon: Market Wrap 10/31/14 http://t.co/N2CM9Ehgio $aapl $googl $fb $twtr $lnkd $amzn $pcln $tsla $bidu $baba $gpro $nflx $spy …
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31 Oct 14 16:23:43
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31 Oct 14 16:20:36
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TheOptionDon
31 Oct 14 16:15:45
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31 Oct 14 15:54:15
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Techi Feeds
31 Oct 14 15:45:42
RT @usatodaytech: Amazon diversity report shows it’s largely white, male $AMZN http://t.co/pyMwPZUj3a
Day Trade Alerts
31 Oct 14 15:42:47
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USA TODAY Technology
31 Oct 14 15:40:53
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Bruce Upbin
31 Oct 14 15:33:56
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31 Oct 14 15:27:52
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31 Oct 14 15:25:33
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31 Oct 14 15:21:11
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31 Oct 14 15:00:07
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31 Oct 14 14:55:26
RT @SeekingAlpha: The Stability Of The Current Tech Market http://t.co/uRkJxq1PVf $AMZN $ANGI $EBAY $GDOT $GOOG $GOOGL $TRLA $XOOM
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31 Oct 14 14:51:02
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31 Oct 14 14:51:02
$GOOG $GOOGL News: "The Stability Of The Current Tech Market $AMZN $ANGI $EBAY …" http://t.co/YAOCI7tr0e Board view: https://t.co/jOJ3ihOOHo
Seeking Alpha
31 Oct 14 14:51:01
The Stability Of The Current Tech Market http://t.co/uRkJxq1PVf $AMZN $ANGI $EBAY $GDOT $GOOG $GOOGL $TRLA $XOOM
Consestimate
31 Oct 14 14:41:15
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FOLLOW ME JUSTIN
31 Oct 14 14:35:39
RT @danprimack: Can you legally yell 'Fire' in a crowded $AMZN store?
Bobby Wilbert
31 Oct 14 14:33:26
$AMZN Amazon's #Diversity Report Is Out, And It's Mostly White Dudes - http://t.co/NdTqmJku1D
Rotten Al
31 Oct 14 14:31:29
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31 Oct 14 14:26:49
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Jeremy Greenfield
31 Oct 14 14:18:29
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Antonio Costa
31 Oct 14 14:18:01
$AMZN Daily short sale volume over the last month http://t.co/vPxcnt3Uwc
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31 Oct 14 14:15:13
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Dividend Master
31 Oct 14 14:13:09
@CapCube guys like you & I make people long $AMZN from $400 feel good about their buy. :)
				
				
By  +Follow December 5, 2013 12:53PM
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