Holiday Shopping Season Could Propel QQQ, QQQM, QQQJ | ETF Trends

Thanksgiving is just a few days away, and that means the 2022 holiday shopping season is about to kick into high gear. Some exchange traded funds are ready to help investors capitalize. For those who don’t want the commitment of dedicated consumer discretionary or retail ETFs, the Invesco QQQ Trust (QQQ) and the Invesco NASDAQ 100 ETF (QQQM) are credible considerations. So is the Invesco NASDAQ Next Gen 100 ETF (QQQJ).

All three ETFs are more than adequately allocated to the consumer cyclical sector, meaning they’re credible plays on holiday shopping trends. QQQ and QQQM track the same index, so the consumer discretionary weights of those ETFs are the same at 14.24%.

Amazon (NASDAQ:AMZN) is the largest consumer cyclical component in both ETFs at a weight of 5.44%, positioning QQQ and QQQM for holiday shopping season relevancy. Goldman Sachs analyst Eric Sheridan recently highlighted Amazon and Etsy (NASDAQ:ETSY) as the bank’s top ideas for the 2022 holiday shopping season.

“Amidst this more uncertain backdrop, our Buy-rated stocks in AMZN and ETSY reflect our preference for: a) profitable and scaled players with higher growth profiles, b) resilient models supported by platform breadth, category diversification and more favorable end-market exposure, and c) our expectation of continued market share consolidation within eCommerce,” noted Sheridan in a report.

Etsy is a member of the QQQJ lineup. That ETF follows the NASDAQ Next Generation 100 Index, which is akin to the AAA affiliate of Nasdaq 100 Index (NDX) — the benchmark that QQQ and QQQM track. Consumer discretionary is the third-largest sector weight in QQQJ behind only technology and healthcare.

Though not directly mentioned by Sheridan, several other QQQJ member firms could benefit from a more-ebullient-than-expected holiday shopping season. As for ETSY, which is one of a dozen consumer discretionary holdings in QQQJ, there’s a lot to like.

“Meanwhile, Etsy is leaning into its differentiated inventory, selling and gifting homemade and affordable products. Etsy sellers have tools to offer more targeted discounts for customers,” reported Sarah Min for CNBC.

As for QQQ and QQQM, those ETFs hold 15 consumer cyclical stocks, including Amazon. While some are levered to retail spending, Amazon is the largest e-commerce company in the U.S.

“Amazon is doubling down on its core retail strategy by stocking up on adequate inventory, accelerating delivery speeds, and maintaining competitive pricing levels against competitors. It’s also expanding Prime benefits for consumers,” according to CNBC.

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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.