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ETFs to Make the Most of Disney+ Growth Story

Sweta Killa

Disney DIS has been fast gaining popularity in the streaming service business. Since its debut on Nov 12, it has been downloaded 22 million times on mobile devices, according to app-tracking firm Apptopia. This shows that it is the most successful launch so far in this nascent industry (read: Frozen 2 Sets Box Office Record: ETFs to Surge).

About 85% (or 18.7 million) of total global downloads were in the United States while Canada, Australia, New Zealand and the Netherlands made up the rest. The streaming app has averaged 9.5 million daily active mobile users, occupying the top spot on both Apple AAPL and Alphabet Inc.’s Google GOOGL app stores. On a per-user basis, Disney+ has 5.8% longer average session time than Netflix and 7.8% longer than Amazon AMZN Prime Video, per Apptopia.

Disney had earlier said that its new service witnessed "extraordinary consumer demand" on the day of the launch, reaching 10 million sign-ups. The app-tracking firm stated that Disney's bundling of the Disney+ app with Hulu and ESPN+ for $12.99 per month has boosted new installs of the apps. It is worth noting that Apptopia only measures mobile downloads and usage, and does not include usage on devices like smart TVs, Roku boxes, Apple TV or desktop web browsers.

Meanwhile, Google announced Disney+ was the top trending search in the United States this year and continues to be the #1 app on Apple and Alphabet app stores. This is another strong sign of consumer interest.

Given the huge success of Disney’s streaming service, investors could tap the opportune moment with consumer ETFs having the largest exposure to this global media and entertainment company. Below we have highlighted some of them:

iShares Evolved U.S. Media and Entertainment ETF IEME

This is an actively managed ETF that employs data science techniques to identify companies with exposure to the media and entertainment sector. Holding 86 stocks in its basket, Disney occupies the top position in the basket with 6.8% share. The fund has accumulated $5.5 million in its asset base and charges 18 bps in annual fees. It trades in a paltry volume of around 2,000 shares (read: ETFs to Tap on Netflix' Strong Subscriber Comeback in Q3).

Multifactor Media and Communications ETF JHCS

This ETF targets a wide range of U.S. media and communication stocks to exploit the sector's opportunities by tracking the John Hancock Dimensional Media and Communications Index. It holds 59 stocks in its basket with DIS taking the third spot at 6.2% share. JHCS has managed assets worth $22 million and charges 40 bps in annual fees. It trades in average daily volume of under 1,000 shares.

iShares U.S. Consumer Services ETF IYC

This ETF offers exposure to U.S. companies that distribute food, drugs, general retail items and media by tracking the Dow Jones U.S. Consumer Services Capped Index. It holds 155 stocks in its basket, with Disney taking the third spot at 5.5%. The fund has amassed $889.4 million in its asset base, and trades in a lower volume of 38,000 shares a day on average. It charges 42 bps in annual fees from investors and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: Gearing Up for Holiday Season: Amazon Versus Walmart ETFs).

Invesco S&P 500 Equal Weight Communication Services ETF EWCO

This fund follows the S&P 500 Equal Weight Communication Services Plus Index. It holds 26 stocks in its basket with Disney occupying the fourth position at 4.9%. The product has amassed $31.9 million in its asset base and trades in average daily volume of 12,000 shares. It charges 40 bps in annual fees and has a Zacks ETF Rank #3.

Communication Services Select Sector SPDR XLC

This ETF offers exposure to the communication services sector of the S&P 500 Index and has accumulated $6.3 billion in its asset base. It follows the Communication Services Select Sector Index and holds 26 stocks in its basket, with Disney occupying the fourth position at 4.7%. The product charges 13 bps in annual fees and trades in average daily volume of 3.1 million shares. It has a Zacks ETF Rank #2 (Buy) (read: Not Santa, Trade Will Rule This December: ETFs to Your Rescue).

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