ETFs To Watch On Amazon.com, Inc.’s Stock Drop

The product has amassed $58.6 million in its asset base and charges 35 bps in annual fees. Volume is light as it exchanges nearly 31,000 shares per day. RTH is down 0.3% in the year-to-date time frame and has a Zacks ETF Rank of 4 or ‘Sell’ rating with a Medium risk outlook (read: Can Carl Icahn Revitalize Retail ETFs?).

First Trust Dow Jones Internet Index (NYSEARCA:FDN)

This is one of the most popular and liquid ETFs in the broad tech space with AUM of over $1.7 billion and average daily volume of more than 576,000 shares. The fund tracks the Dow Jones Internet Composite Index and charges 57 bps in fees per year.

In total, the fund holds 42 stocks in its basket with Amazon taking the top spot with a 9.05% share. From a sector look, Internet mobile applications account for more than half of the portfolio while Internet retail makes up for 26%. The ETF added just 0.55% year-to-date and has a Zacks Rank of 3 or ‘Hold’ rating with a Medium risk outlook.

PowerShares Nasdaq Internet Portfolio (NASDAQ:PNQI)

This fund follows the Nasdaq Internet Index, giving investors exposure to the broad Internet industry. The fund holds about 99 stocks in its basket with AUM of $322.6 million while charging 60 bps in fees per year. It trades in moderate volumes of around 72,000 shares a day.

Amazon occupies the top position with an 8.62% allocation. In terms of industrial exposure, Internet software and services makes up for more than two-thirds of the share in the basket, followed by Internet retail (30.35%). PNQI is up 1.2% so far this year and currently has a Zacks Rank of 3 with a Medium risk outlook.

Bottom Line

Investors should note that these products might not perform as badly as the stock. This is because these ETFs provide diversified exposure to various segments and securities, suggesting that the space can easily counter shocks from some of the industry’s biggest components.

As such, investors shouldn’t completely write off the above-mentioned ETFs from their holdings based on AMZN’s weak earnings and sluggish short-term outlook.

This article is brought to you courtesy of Sweta Killa.

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