An ETF for the Holidays

NEW YORK (TheStreet) -- Recession or not, the holidays are approaching, and cost-conscious investors will hit Internet sites like Amazon(AMZN Quote) and eBay(EBAY Quote) to ferret out the best price on popular goods.

Rather than trying to pick a retail fund for recession holiday shopping, consider the First Trust Dow Jones Internet Index Fund(FDN Quote), an ETF that is in the right place at the right time.

FDN tracks 41 companies that generate at least 50% of their annual sales from the Internet. This group is selected using a modified-market cap methodology that picks from companies that have a stock price of greater than $10 and a market cap of at least $100 million. FDN is rebalanced quarterly, with a net expense ratio of 0.60%.

FDN has advanced 23% in the past three months and is up more than 70% year to date.

The largest two sectors represented in FDN's portfolio are consumer discretionary and information technology, with 18.48% and 70.36% allocations respectively. FDN's top 10 holdings comprise 51% of the funds assets.

FDN's top holding -- Google(GOOG Quote) -- stands at the nexus of the Internet shopping experience. GOOG's solid quarterly earnings suggest that this Internet giant has weathered the economic malaise effectively. Google Shopping, a key component of the roster, helps to centralize merchants and provide easier "checkout" for consumers seeking to compare the same item on different sites.

Amazon(AMZN Quote), FDN's second largest component, has seen solid growth overseas even as consumer spending has been curtailed back home. Long considered a one-stop-shop for many holiday investors, AMZN is a hub for merchants and consumers alike. This shopper-conscious center will wrap and ship holiday purchases for the home shopper.