ETFs to Tap on Soaring E-Commerce Sales Amid Coronavirus
by SWETA KILLA – Zacks on APRIL 27, 2020
The COVID-19 pandemic has ramped up the digital shift, which is likely to last longer than expected even after the economy reopens. E-commerce companies have been the most sought after on Wall Street as lockdowns have resulted in the forced closure of malls and retail stores.
E-commerce sales climbed at the highest pace since late February, jumping 25% during the week ending Apr 20, according to Signifyd’s E-commerce Pulse data. The jump surpassed the previous record of 17% for the week ending Apr 6. Overall, there is an increase of 85% in ecommerce spending since late February. According to the market research firm Rakuten Intelligence, e-commerce spending in the United States is up more than 30% from the beginning of March through mid-April compared with the same period last year (read: Hot ETFs to Tap Consumers’ Digital Shift Amid Coronavirus).
Although online grocery sales were the least investor favorite, it has emerged as the hottest category during the epidemic. According to Nielsen and Rakuten Intelligence, U.S. online sales of consumer-packaged goods (CPG) — the kind of items typically sold in grocery stores — grew 56% for the week ending Apr 18. Food topped the list, with sales soaring 69.5% year over year, followed by a 57.5% surge in online sales of household care items and growth in the health and beauty care (47.7%), baby care (27.2%) and pet care (22.3%) categories.
Per Namogoo, online supermarket visits were up 162% from the year-ago levels in March and up 146% from February 2020.
Bloomberg stated that Amazon AMZN is the top-most, high-profile winner of the current environment. Shares of AMZN jumped more than 40% from a low hit last month and has nearly overtaken Apple AAPL in market capitalization. Goldman believes that the pandemic would “steepen the curve of Amazon’s long-term growth rate, drive incremental profitability, and further deepen the competitive moat around all of its businesses.”
Other e-commerce stocks saw bigger share-price rallies. Shopify SHOP is up more than 85% from a low hit earlier this month, becoming one of the most valuable companies in Canada, while Wayfair W has more than quintupled off a March low, having surged more than 400% over the period. Shares of eBay EBAY are also up nearly 50% from a low hit last month.
Below we have highlighted some ETFs to tap soaring e-commerce sales:
Amplify Online Retail ETF – IBUY
This ETF offers global exposure to companies that derive 70% or more revenues from online and virtual retail by tracking the EQM Online Retail Index. The fund comprises 47 stocks and has attracted $257.1 million in its asset base. It charges 65 bps in fees per year and trades in average daily volume of 44,000 shares. The product has gained 27% in a month.
ProShares Online Retail ETF – ONLN
This ETF focuses on global retailers that derive significant revenues from online sales. It tracks the ProShares Online Retail Index, holding 24 stocks in its basket. The product has amassed $76.7 million in its asset base and trades in paltry volume of around 26,000 shares a day on average. It charges 58 bps in annual fees from investors and has risen 26.9% in a month.
Global X E-commerce ETF – EBIZ
This fund invests in companies positioned to benefit from increased adoption of e-commerce as a distribution model, including companies whose principal business is in operating e-commerce platforms, providing related software and services, and/or selling goods and services online. It has accumulated $10 million in its asset base and charges 50 bps in annual fees. The ETF sees average daily volume of 7,000 shares and is up 22.8% in a month (read: 5 Best Sector ETFs Halfway Through April).
O’Shares Global Internet Giants ETF – OGIG
The fund invests in some of the largest global companies that derive most of their revenues from the Internet and e-commerce sectors that exhibit quality and growth potential by tracking the O’Shares Global Internet Giants Index. It holds a basket of 70 stocks and charges 48 bps in annual fees. OGIG has been able to attract $73.3 million in its asset base and trades in average daily volume of 49,000 shares. It has gained 18.2% in a month.
SPDR S&P Internet ETF – XWEB
This product follows the S&P Internet Select Industry Index, holding 42 stocks in its basket. It charges 35 bps in annual fees and trades in a volume of 3,000 shares. With AUM of $14.2 million, the fund has gained 23.5% and carries a Zacks ETF Rank #2 (Buy).
Invesco NASDAQ Internet ETF – PNQI
This fund offers exposure to the largest and most-liquid companies that are engaged in Internet-related businesses by tracking the Nasdaq Internet Index. Holding 81 stocks in its basket, it has AUM of $546.1 million and trades in lower volume of about 29,000 shares a day. It charges 62 bps in fees per year and carries a Zacks ETF Rank #2. PNQI has added 17.3% in a month (read: Stay-at-Home Boosts Netflix Q1 Subscribers: ETFs to Buy).
First Trust Dow Jones Internet Index Fund – FDN
This fund follows the Dow Jones Internet Composite Index, giving investors exposure to the broad Internet industry. It holds about 42 stocks in its basket. FDN is the most popular and liquid ETFs in the broad technology space with AUM of $8.1 billion and average daily volume of around 470,000 shares. It charges 52 bps in fees per year and has a Zacks ETF Rank #2. The ETF is up 17.6% in a month.
Read on Nasdaq site.
The outbreak of COVID-19 has negatively affected the worldwide economy, individual countries, individual companies and the market in general. The future impact of COVID-19 is currently unknown, and it may exacerbate other risks that apply to the Funds.
Past performance does not guarantee future results. Short-term performance may often reflect conditions that are likely not sustainable, and thus such performance may not be repeated in the future.
There is no guarantee that any projection, forecast or opinion in this material will be realized. The views expressed may change at any time after the date of this publication.
For standard performance of the Fund, Click Here
OGIG Holdings
| Name (As of 08/05/2020) | Country | Sector | Fund Weight |
|---|---|---|---|
| Amazon.com Inc | US | Consumer Discretionary | 6.0542% |
| Alibaba Group Holding Ltd | CN | Consumer Discretionary | 5.9143% |
| Tencent Holdings Ltd | CN | Communication Services | 5.45% |
| Microsoft Corp | US | Information Technology | 4.7653% |
| Alphabet Inc | US | Communication Services | 4.5921% |
| Facebook Inc | US | Communication Services | 4.1485% |
| Shopify Inc | CA | Information Technology | 2.5619% |
| Meituan Dianping | CN | Consumer Discretionary | 2.5256% |
| Pinduoduo Inc | CN | Consumer Discretionary | 2.4628% |
| Zoom Video Communications Inc | US | Information Technology | 2.0872% |
| MercadoLibre Inc | AR | Consumer Discretionary | 1.9022% |
| Pinterest Inc | US | Communication Services | 1.7367% |
| Netflix Inc | US | Communication Services | 1.7105% |
| salesforce.com Inc | US | Information Technology | 1.604% |
| DocuSign Inc | US | Information Technology | 1.5437% |
| Twilio Inc | US | Information Technology | 1.5123% |
| ServiceNow Inc | US | Information Technology | 1.5121% |
| Bilibili Inc | CN | Communication Services | 1.5114% |
| HUYA Inc | CN | Communication Services | 1.5088% |
| Kingsoft Corp Ltd | CN | Information Technology | 1.4793% |
| Delivery Hero SE | DE | Consumer Discretionary | 1.4681% |
| Coupa Software Inc | US | Information Technology | 1.4491% |
| Crowdstrike Holdings Inc | US | Information Technology | 1.4482% |
| Adobe Inc | US | Information Technology | 1.4472% |
| Zillow Group Inc | US | Communication Services | 1.42% |
| Okta Inc | US | Information Technology | 1.3968% |
| Trade Desk Inc/The | US | Information Technology | 1.3341% |
| Etsy Inc | US | Consumer Discretionary | 1.3207% |
| Snap Inc | US | Communication Services | 1.32% |
| Tencent Music Entertainment Gr | CN | Communication Services | 1.2109% |
| Zscaler Inc | US | Information Technology | 1.2065% |
| Match Group Inc | US | Communication Services | 1.1882% |
| Elastic NV | US | Information Technology | 1.1689% |
| JD.com Inc | CN | Consumer Discretionary | 1.1557% |
| Splunk Inc | US | Information Technology | 1.1432% |
| Wayfair Inc | US | Consumer Discretionary | 1.1343% |
| Smartsheet Inc | US | Information Technology | 1.1059% |
| MongoDB Inc | US | Information Technology | 1.1009% |
| Atlassian Corp PLC | AU | Information Technology | 1.083% |
| Chewy Inc | US | Consumer Discretionary | 1.0728% |
| Xero Ltd | NZ | Information Technology | 1.0603% |
| Wix.com Ltd | IL | Information Technology | 1.0488% |
| Zendesk Inc | US | Information Technology | 1.0299% |
| Spotify Technology SA | SE | Communication Services | 1.0197% |
| Avalara Inc | US | Information Technology | 0.9991% |
| RingCentral Inc | US | Information Technology | 0.9664% |
| Anaplan Inc | US | Information Technology | 0.9527% |
| HubSpot Inc | US | Information Technology | 0.862% |
| Workday Inc | US | Information Technology | 0.7426% |
| Palo Alto Networks Inc | US | Information Technology | 0.6833% |
| Zynga Inc | US | Communication Services | 0.6766% |
| Ubisoft Entertainment SA | FR | Communication Services | 0.5704% |
| Fortinet Inc | US | Information Technology | 0.5575% |
| Momo Inc | CN | Communication Services | 0.5506% |
| Guidewire Software Inc | US | Information Technology | 0.5327% |
| Zalando SE | DE | Consumer Discretionary | 0.5322% |
| VMware Inc | US | Information Technology | 0.5248% |
| Twitter Inc | US | Communication Services | 0.5191% |
| Intuit Inc | US | Information Technology | 0.4818% |
| Temenos AG | CH | Information Technology | 0.4663% |
| LINE Corp | JP | Communication Services | 0.4657% |
| Trip.com Group Ltd | CN | Consumer Discretionary | 0.4302% |
| Rakuten Inc | JP | Consumer Discretionary | 0.4298% |
| NetEase Inc | CN | Communication Services | 0.3681% |
| Z Holdings Corp | JP | Communication Services | 0.3614% |
| Baidu Inc | CN | Communication Services | 0.3532% |
| Activision Blizzard Inc | US | Communication Services | 0.3087% |
| Booking Holdings Inc | US | Consumer Discretionary | 0.2491% |
| VeriSign Inc | US | Information Technology | 0.2167% |
| IAC/InterActiveCorp | US | Communication Services | 0.209% |
| US DOLLAR | Cash | Cash | 0.0728% |
| JAPANESE YEN | Cash | Cash | 0.0009% |
| CANADIAN DOLLAR | Cash | Cash | 0.0% |