How to Invest in Amazon through ETFs

Amazon Reports Record-Breaking Revenues in Q1 2024

In the first quarter of 2024, Amazon reported unprecedented revenues of $143.3 billion, marking a 13% increase compared to the same period the previous year.
The net income was $10.4 billion, significantly surpassing the $3.2 billion from the previous year.

CEO Andy Jassy highlighted that these results reflect an enhanced consumer experience and solid financial performance, driven in part by the success of the cloud and artificial intelligence (AI) divisions.

Thanks to these impressive financial results, with record revenues and earnings exceeding expectations, interest in Amazon has surged even further.
A strategic way to invest in the stock without directly purchasing individual shares is through Exchange-Traded Funds (ETFs).
Let’s delve into how!

Investing in Amazon through ETFs

ETFs offer a convenient and diversified approach to investing in Amazon, providing exposure to a basket of stocks, including Amazon, thus reducing risk compared to buying individual shares.
Let’s take a closer look at three ETFs that include Amazon as a significant component.

1.
Xtrackers MSCI USA Consumer Discretionary
This ETF aims to replicate the MSCI USA Consumer Discretionary 20/35 Custom index, which comprises large and mid-sized companies in the discretionary consumer sector in the United States.
Amazon represents 33% of the ETF’s weight, making it a substantial option for those looking to invest in the stock.
With an annual Total Expense Ratio (TER) of 0.12%, this ETF manages assets of €405 million and distributes dividends annually to investors.
Launched on September 12, 2017, this ETF is domiciled in Ireland.

2.
iShares S&P 500 Consumer Discretionary Sector
Replicating the S&P 500 Capped 35/20 Consumer Discretionary index, this ETF includes companies in the consumer discretionary sector in the United States, with Amazon accounting for 31.46% of the total weight.
The ETF has an annual TER of 0.15%, with dividends reinvested.
Managing assets of €418 million, it was launched on November 20, 2015, also domiciled in Ireland.

3.
Amundi S&P Global Consumer Discretionary ESG
This ETF offers a sustainable approach by replicating the S&P Developed Ex-Korea Large MidCap Sustainability Enhanced Consumer Discretionary index, considering ESG (environmental, social, and governance) criteria in stock selection.
Amazon constitutes 25.5% of the ETF’s weight.
With an annual TER of 0.18%, this ETF manages around €266 million in assets and was launched on September 20, 2022.
Accumulated dividends are reinvested.

Advantages of Investing in Amazon through ETFs

1.
Diversification: ETFs provide exposure to a wide range of stocks, reducing the risk associated with investing in a single company.
2.
Lower Costs: ETFs generally have lower management fees compared to mutual funds.
3.
Accessibility: ETFs are traded on exchanges like stocks, making buying and selling easy.
4.
Sector Exposure: By investing in specific sector ETFs like consumer discretionary, investors can benefit from the performance of the entire sector, including Amazon.

Investing in Amazon through ETFs is a smart strategy for those seeking exposure to one of the most dynamic and growing companies globally without facing the volatility of directly buying its shares.
ETFs such as Xtrackers MSCI USA Consumer Discretionary, iShares S&P 500 Consumer Discretionary Sector, and Amundi S&P Global Consumer Discretionary ESG offer various options in terms of costs, investment approach, and dividend distribution.
Before investing, carefully assess your financial goals and risk profile, considering the historical performance and future prospects of Amazon and the chosen ETFs.
Remember, investment decisions should be made prudently and aligned with your risk tolerance and investment horizon.

Disclaimer: The information and considerations in this article should not be the sole basis for making investment decisions.
Readers are solely responsible for their investment choices, as they best understand their risk tolerance and time horizon.
The information provided is for informational purposes only and should not be considered an offer or solicitation for savings.