Amazon stock has surged 11% over the past six months, fueled by robust demand for its cloud and e-commerce platforms. The company’s investments in AI and in-house chips position it well for the future. Also, CEO Andy Jassy‘s focus on improving e-commerce profits has led to better operating margins. Thus, investors looking for exposure to AMZN stock may consider investing in these two ETFs: Vanguard Consumer Discretionary ETF (VCR) and Consumer Discretionary Select Sector SPDR Fund (XLY).
Let’s take a deeper look at these two ETFs.
Vanguard Consumer Discretionary ETF
The VCR ETF tracks the performance of the MSCI US Investable Market Consumer Discretionary 25/50 Index. This index includes stocks of large, medium, and small U.S. companies in the consumer discretionary sector, such as retail, entertainment, and automotive industries. Importantly, Amazon stock accounts for 23.51% of VCR’s total holdings.
Some of the top holdings in VCR ETF include Tesla (TSLA), McDonald’s (MCD), and Home Depot (HD). Overall, the ETF has $5.94 billion in assets under management (AUM). Also, an expense ratio of 0.09% makes it cost-effective for long-term investors. Over the past six months, the VCR ETF has generated a return of 6.91%.
On TipRanks, VCR has a Moderate Buy consensus rating based on 193 Buys, 89 Holds, and 14 Sells assigned in the last three months. At $426.95, the average VCR ETF price target implies 26.1% upside potential.
Consumer Discretionary Select Sector SPDR Fund
The XLY ETF tracks the performance of the Consumer Discretionary Select Sector Index, which represents the consumer discretionary sector of the S&P 500 Index (SPX). This sector includes industries like retail, entertainment, automobiles, and luxury goods.
AMZN stock constitutes 20.66% of the ETF’s holdings. Apart from AMZN, some of the top stocks in the XLY ETF are Tesla, Lowe’s (LOW), and Starbucks (SBUX). Overall, the ETF has $5.91 billion in AUM. Also, it has an expense ratio of 0.09%. The XLY ETF has returned 10.31% in the past six months.
Turning to Wall Street, the ETF has a Moderate Buy consensus rating. Of the 52 stocks held, 43 have Buys, eight have a Hold, and one Sell rating. At $250.86, the average XLY ETF price target implies a 23.88% upside potential.
Concluding Thoughts
ETFs provide indirect exposure to AMZN, reducing risk compared to investing directly in the stock. Furthermore, ETFs are a liquid and transparent way to participate in the market. Investors seeking ETF recommendations might consider XLY and VCR, as these ETFs offer exposure to Amazon stock.