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7 ETFs Primed to Profit From the Coming Holiday Season

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  • Amplify Online Retail ETF (IBUY): With an expense ratio of 0.65%, IBUY is oversold.
  • ProShares Online Retail ETF (ONLN): From a current price of $30.71, I’d like to see it retest $34 very soon.
  • SPDR S&P Retail ETF (XRT): Not only is this fund oversold, but it is also sitting at strong support.
  • Continue reading for the complete list of ETFs to buy here!
ETFs to Buy - 7 ETFs Primed to Profit From the Coming Holiday Season

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With the 2023 holidays around the corner, it’s time to look at top exchange-traded funds (ETFs) to buy. Sure, it’s a bit early. But we have to remember consumers like to start shopping way in advance of holidays. In fact, according to the National Retail Federation, about 46% of consumers started holiday shopping before November 2022, up from 39% in 2019.

Also, according to Deloitte, 2023 holiday sales could rise about 3.5% to 4.6%, resulting in sales of about $1.54 trillion to $1.56 trillion. While that’s slower than last year’s growth of 7.6%, it’s to be expected with higher inflation, higher interest rates and spending cutbacks.

Meanwhile, holiday e-commerce sales could see a year-over-year boost. According to Reuters, “The sales are also expected to grow at a much faster pace and hit $221.8 billion for the period between Nov. 1 and Dec. 31, which includes some of the biggest shopping days such as Cyber Monday, Thanksgiving and Black Friday. That compares with $211.7 billion a year earlier.”

That being said, some of the top ways to potentially profit are with ETFs. After all, not only do these funds help diversify your portfolio, but they do so at far less cost. Here are seven of the top ETFs to buy.

ETFs to Buy: Amplify Online Retail ETF (IBUY)

Friends sit on a ledge with shopping bags after shopping retail stores. Retail Stocks to Buy
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With an expense ratio of 0.65%, the Amplify Online Retail ETF (NYSEARCA:IBUY) is oversold at the moment. However, it should benefit from an expected surge in e-commerce spending, especially with holdings in Affirm Holdings (NASDAQ:AFRM), Amazon (NASDAQ:AMZN), BigCommerce Holdings (NASDAQ:BIGC), Apple (NASDAQ:AAPL) and Netflix (NASDAQ:NFLX) — a few heavyweights on the list.

With net assets of $178 million, the ETF tracks the EQM Online Retail Index. That benchmark says its components derive at least 70% of revenues, or a minimum of $100 billion in annual sales from online and/or virtual sales.

ProShares Online Retail ETF (ONLN)

An image of a tablet with icons overlaid; magnifying glass, globe, shopping cart, money, truck
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Or, take a look at the ProShares Online Retail ETF (NYSEARCA:ONLN), which is just as oversold. With an expense ratio of 0.58%, some of its top holdings include Amazon, Alibaba (NYSE:BABA), eBay (NASDAQ:EBAY), Williams Sonoma (NYSE:WSM) and Etsy (NASDAQ:ETSY) — to name a few.

To be included in the ETF, a company must be deemed an online retailer with a market cap of at least $500 million. From a current price of $30.71, I’d like to see it retest $34 as we near the holidays.

ETFs to Buy: SPDR S&P Retail ETF (XRT)

Shopping mall blur
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Another fund to consider is the SPDR S&P Retail ETF (NYSEARCA:XRT).

Not only is it oversold, but it’s also sitting at strong support dating back to early June 2022. From a current price of $58.96, I’d like to see it rally back to $75 as we near the holidays. Better, if you pull up a five-year chart of the XRT, you can see it has a history of blasting higher during the holidays. I expect to see a similar move this year, too.

With an expense ratio of 0.35%, the ETF tracks the performance of the S&P Retail Select Industry Index. Some of its top holdings include Costco (NASDAQ:COST), Foot Locker (NYSE:FL), The Gap (NYSE:GPS), Nordstrom (NYSE:JWN), Best Buy (NYSE:BBY) and Walmart (NYSE:WMT).

Direxion Daily AMZN Bull 1.5x Shares (AMZU)

Logistics activity on the Amazon (AMZN) site of Vélizy-Villacoublay in France. Packages are sorted by workers on conveyors.
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The Direxion Daily AMZN Bull 1.5x Shares (NASDAQ:AMZU) is another interesting opportunity. With an expense ratio of 1.06%, this ETF offers single-stock exposure to Amazon. With this one, the fund seeks 150% daily leveraged investment results. Better, after dropping from about $27 to $21, the ETF appears to have caught strong support. From a current price of $23.03, I’d like to see it again challenge resistance at $27.

ETFs to Buy: VanEck Retail ETF (RTH)

E-commerce concept showing online retail exchange between two computer screens on light blue background.
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Take a look at the VanEck Vectors Retail ETF (NASDAQ:RTH), too. It’s also technically oversold, with a history of running higher ahead of the holidays as well. In fact, from its current price of $168.28, I believe it could again push higher. I’d like to see it challenge at least $180 initially.

With an expense ratio of 0.35%, the fund tracks the MVIS US Listed Retail 25 Index. At the moment, it holds Amazon, Home Depot (NYSE:HD), Walmart, Costco, Lowe’s (NYSE:LOW) and TJX Companies (NYSE:TJX) as some of its top holdings.

VanEck Vectors Video Gaming and eSports ETF (ESPO)

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In many of the last few years, the VanEck Video Gaming and eSports ETF (NASDAQ:ESPO) pushed higher as the holiday season neared. I believe it could be gearing up for another run higher from its current price of $52.55, with strong video game sales expected.

With an expense ratio of 0.56%, the ETF tracks the MVIS Global Video Gaming and eSports Index. Some of its top holdings include Nvidia (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD), Activision Blizzard (NASDAQ:ATVI), Nintendo (OTCMKTS:NTDOY), Electronic Arts (NASDAQ:EA) and Take-Two Interactive Software (NASDAQ:TTWO). That last holding is nearing the release of the ultra-popular game Grand Theft Auto VI, which could see explosive growth. In fact, analysts at Raymond James (NYSE:RJF), which upgraded TTWO to Outperform, said GTA VI could sell 35 million copies in its first year.

Vanguard Consumer Discretionary Fund (VCR)

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Let’s wrap up this list with the Vanguard Consumer Discretionary ETF (NYSEARCA:VCR).

With an expense ratio of 0.10%, the ETF holds 308 top retail stocks and trades at $268 a share. Some of its top holdings include Amazon, Tesla (NASDAQ:TSLA), Home Depot, McDonald’s (NYSE:MCD), Lowe’s, Starbucks (NASDAQ:SBUX), Booking Holdings (NASDAQ:BKNG) and Nike (NYSE:NKE) — to name a few. Better, the VCR ETF tends to push higher as we near the holiday season as well. I’d use the recent pullback as an opportunity.

On the date of publication, Ian Cooper did not hold (directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


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