An ETF For Amazon Earnings

Amazon.com Inc. AMZN reports earnings April 27 after the close of U.S. markets. Wall Street expects the e-commerce giant to report a profit of $1.11 a share on sales of $35.4 billion.

Over 100 exchange-traded funds feature exposure to Amazon and that is a good thing for those ETFs when the stock is surging and that is exactly what it is doing this year with a year-to-date of almost 20 percent. That provides a boost to Amazon ETFs, namely the scores of cap-weighted consumer discretionary funds with big allocations to the stock.

Focusing On FDIS

The Fidelity MSCI Consumer Discretionary ETF FDIS is among that group. One of just a handful of ETF to hit all-time highs last Friday, FDIS is up 8.6 percent year-to-date and Amazon is a big reason why. FDIS, home to $268.1 million in assets under management, holds nearly 370 stocks, but Amazon is by far the ETF's largest holding at a weight of almost 11.5 percent. That is nearly double the weight assigned to FDIS's second-largest holding, Dow component Home Depot Inc HD.

FDIS has one of the largest weights to Amazon among all ETFs, but the ETF is also large relative to other consumer discretionary ETFs. For example, the largest consumer discretionary ETF holds less than 90 stocks, a far cry from the 368 found in FDIS. FDIS tracks the MSCI USA IMI Consumer Discretionary Index.

There are also macro factors to consider when mulling investments in FDIS or competing discretionary ETFs. For example, many of the companies found in these ETFs have significant overseas exposure. Additionally, the consumer discretionary sector has a history of being more volatile than the broader market.

Including Home Depot, there are four members of the Dow Jones Industrial Average among the top 10 holdings in FDIS. All four of those stocks are among the 22 Dow members that are up year-to-date and three are among the seven Dow stocks that are up at least 10 percent this year.

For cash-starved investors looking for exposure to Amazon and its nearly $900 price tag, FDIS makes sense at just under $35 per share. Plus, FDIS is the least expensive consumer discretionary ETF with an annual fee of 0.084 percent, or $8.40 on a $10,000 investment.