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ETFs Set to Soar on Solid Thanksgiving Weekend Sales

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Americans spent considerably this year over the five-day Thanksgiving weekend, lured by free shipping offers, a limited sale or promotion, or a positive review that helped to convince most shoppers to finally make a purchase. This is likely to boost several ETFs, especially the ones that benefit from a surge in consumer spending. 

The retail sector is likely to emerge as the biggest beneficiary. An increase in online sales also tends to boost technology and payment processing sectors, making the related ETFs attractive. SPDR S&P Retail ETF (XRT - Free Report) , Amplify Online Retail ETF (IBUY - Free Report) , ProShares Online Retail ETF (ONLN - Free Report) , Amplify Digital Payments ETF (IPAY - Free Report) and Invesco S&P SmallCap Consumer Discretionary ETF (PSCD - Free Report) will likely reap the benefits of the Thanksgiving weekend spending. 

According to the National Retail Federation (“NRF”), about 197 million shoppers engaged in in-store and online purchases over the Thanksgiving weekend (Thanksgiving Day through Cyber Monday). Though the number of shoppers is lower than the 200 million in 2023, it exceeded NRF's initial estimates of 183.4 million. Approximately 126 million people visited physical retail locations (up from 121.4 million in 2023), while 124.3 million opted for online shopping (down from 134.2 million). 

The top shopping destinations during Thanksgiving weekend were department stores (42%), online (42%), grocery stores and supermarkets (40%), clothing and accessories stores (37%) and discount stores (32%). 

Black Friday remains the most popular shopping day for both in-store and online shopping. The NRF survey found 81.7 million consumers shopped in stores on Black Friday, up from 76.2 million last year and the highest level since the pandemic. Approximately 87.3 million shopped online, down slightly from 90.6 million in 2023. 

Saturday was the second highest for in-store shopping when 61.1 million consumers went to browse and buy in stores. Cyber Monday was the second most popular day for online shopping, with 64.4 million consumers compared with 73.1 million in 2023. About 63% of Cyber Monday online shoppers used their mobile devices for purchases. This marked an increase from 55% last year and the highest rate since NRF started tracking it (read: Stocks & ETFs in Focus on Cyber Monday).  

On average, consumers spent $235 on holiday gifts during the five-day period, up $8 from last year. The top gifts included clothing and accessories (bought by 49% of those surveyed), toys (31%), gift cards (27%), food and candy (23%) and personal care or beauty items (23%). 

Per Adobe Analytics, online sales jumped 8.2% to a historic high of $41.1 billion during Cyber Week, indicating a robust start to the holiday shopping season. Cyber Monday was the biggest spending day, with sales climbing 7.3% to a record $13.3 billion as shoppers took advantage of bigger-than-expected discounts on various categories. The discounts peaked at 30.1% in electronics, 26.1% in toys, 23.2% in apparel, 21.8% in televisions and 21.5% in computers.

While Cyber Monday remained the season’s and the year’s biggest online shopping day, year-over-year growth was stronger on both Thanksgiving and Black Friday.  Online spending rose 8.8% to $6.1 billion on Thanksgiving and 10.2% on Black Friday. Adobe expects the full holiday season to hit $240.8 billion in online spending, up 8.4% year over year.

ETFs in Focus

SPDR S&P Retail ETF (XRT - Free Report)

SPDR S&P Retail ETF tracks the S&P Retail Select Industry Index, which provides exposure across large, mid and small-cap stocks. It holds well-diversified 78 stocks in its basket, with none making up for more than 2.2% share. SPDR S&P Retail ETF is well spread across various industries with a double-digit allocation each in automotive retail, apparel retail, specialty stores, and broadline retail (read: Best-Performing ETF Areas of Last Week). 

SPDR S&P Retail ETF is the largest and most popular in the retail space, with AUM of $626 million and an average trading volume of 4.4 million shares. It charges 35 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.

Amplify Online Retail ETF (IBUY - Free Report)  

Amplify Online Retail ETF offers global exposure to companies with significant revenues from the online retail business, traditional online retail, online travel, online marketplace and omni channel retail by tracking the EQM Online Retail Index. IBUY holds 77 stocks in its basket, with none accounting for more than 3.4% of assets. Amplify Online Retail ETF has the largest allocation in online retail at 40% and online marketplace at 37%. 

Amplify Online Retail ETF has attracted $187.1 million in its asset base and charges 65 bps in annual fees. IBUY trades in an average daily volume of 15,000 shares. 

ProShares Online Retail ETF (ONLN - Free Report)

ProShares Online Retail ETF offers exposure to companies that principally sell online or through other non-store channels and then zeroes in on the companies reshaping the retail space. It tracks the ProShares Online Retail Index, holding 19 stocks in its basket. ONLN is highly concentrated on the top firm, while the other firms hold no more than 8.3% of the assets. 

ProShares Online Retail ETF has accumulated $93.7 million in its asset base and charges 58 bps in annual fees. ONLN trades in an average daily volume of 10,000 shares.

Amplify Digital Payments ETF (IPAY - Free Report)

Amplify Digital Payments ETF provides access to global companies involved in payment-related products and/or services including card networks, infrastructure & software, processors and solutions. It follows the Nasdaq CTA Global Digital Payments Index and holds 36 stocks in its basket, with each making up for 6.2% of assets.

Amplify Digital Payments ETF has AUM of $345.6 million and charges 75 bps in annual fees. It trades in an average daily volume of 18,000 shares.

Invesco S&P SmallCap Consumer Discretionary ETF (PSCD - Free Report)  

Invesco S&P SmallCap Consumer Discretionary ETF targets the small-cap segment of the broad consumer discretionary space by tracking the S&P SmallCap 600 Capped Consumer Discretionary Index. It holds 85 securities in its basket, with specialty retail taking the largest share at 27.7%, while household durables, and hotels, restaurants and leisure account for double-digit exposure each (read: 5 ETFs to Binge on This Thanksgiving Week). 

Invesco S&P SmallCap Consumer Discretionary ETF has attracted $27.9 million in AUM and charges 29 bps in annual fees. It trades in an average daily volume of about 1,000 shares and has a Zacks ETF Rank #3 with a High risk outlook.

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