Investors Feast on This Amazon-Heavy ETF as the Retailer Nears a Trillion

(Bloomberg) -- With Amazon.com Inc. about $25 billion away from becoming America’s second trillion-dollar company, investors are piling into an exchange-traded fund with a whopping 25 percent exposure to Jeff Bezos’ online superstore.

State Street Corp.’s Consumer Discretionary Select Sector SPDR Fund, or XLY, has taken in over $546 million this week, putting it on track for its best week in over three years. The flows are a continuation from the previous week, when investors poured $524 million into the fund. Its assets have surged more than 23 percent this year to a record $16 billion. After Amazon, the fund’s second biggest holding is Home Depot Inc. at 7.3 percent.

Shares of the internet giant passed $2,000 for the first time Thursday morning after Morgan Stanley said sales growth remains strong. The bank lifted its price target on the stock by 35 percent on Wednesday to the highest level among analysts surveyed by Bloomberg. Amazon’s market capitalization is $985 billion, more than any company other than Apple Inc., which is at $1.1 trillion.

More broadly, robust earnings from retailers have shined a light on the health of U.S. consumers, with Target’s Chief Executive Officer Brian Cornell describing the environment as the “strongest” he’s seen in his career. That’s reflected in economic data released Thursday, which showed that consumer spending continued to rise in July.

“The consumer is doing their part to keep the economy’s engines running strong in the second half of the year,” Chris Rupkey, chief financial economist at MUFG Union Bank in New York, wrote in a note to clients.

--With assistance from Tom Lagerman.

To contact the reporters on this story: Carolina Wilson in New York City at cwilson166@bloomberg.net;Sarah Ponczek in New York at sponczek2@bloomberg.net

To contact the editors responsible for this story: Courtney Dentch at cdentch1@bloomberg.net, Eric J. Weiner, Andrew Dunn

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