Kevin O’Leary Targets Global Internet Giants
By: Jim Woods
Editor, Successful Investing and Intelligence Report
07/16/2018 5:00 am EST
Focus: ETFS
O’Shares Global Internet Giants ETF (OGIG) is the newest addition to O’Shares’ growing list of ETFs that are focused on long-term wealth management, asserts Jim Woods, fund expert and editor of Successful Investing.
O’Shares Chairman Kevin O’Leary shared an example of the rule-based active management at work at O’Shares when the Trump tax cuts took place.
To tap the opportunity, O’Shares management took advantage by rebalancing holdings towards a heavier allocation in strongly profitable small-cap companies that had the majority of their revenues in the United States, as opposed to overseas, since these were the companies that stood to gain the most.
With the explosion of advancements in e-commerce and internet technology, O’Shares rolled out OGIG on June 5, 2018, and it could hardly have come at a more appealing time. OGIG’s focus is on internet-related companies that exhibit certain growth and quality characteristics.
More specifically, the fund measures quality using a monthly “cash burn rate,” or how much investor capital is spent per month. It also measures growth primarily by revenue growth rate.
OGIG screens the 1,000 largest U.S.-listed companies, the 500 largest European companies, the 500 largest Pacific basin companies and the 500 largest emerging market companies for stocks that best match the aforementioned quality and growth characteristics.
As part of its investment strategy, OGIG believes in the potential of the Chinese internet companies. In a recently released report, O’Shares revealed that e-commerce sales in China hit $1.1 trillion in 2017, which represents more than 21% of the $5.6 trillion in total retail sales. Furthermore, in the last three years, e-commerce in China has grown over 145%.
After its inception, OGIG’s share prices soon hit a high of $26 before retreating to the $24 level. Keep in mind that OGIG only has been in existence for less than a month, so looking solely at the numbers can be misleading, especially since technology and e-commerce companies have come under pressure lately due to the possibility of a trade war. The fund has an expense ratio of 0.48%.
From a sector perspective, OGIG is 74% invested in information technology and 25% in consumer discretionary. As far as country exposure goes, some of the biggest are the United States, 55%; China, 31%; and the United Kingdom, 5%.
For investors who are looking to hold a stake in the growing internet technology and e-commerce sectors, consider buying shares in O’Shares Global Internet Giants ETF.
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OGIG Fund Page | OGIG Holdings
| Name (As of 01/28/2020) | Country | Sector | Fund Weight |
|---|---|---|---|
| Facebook Inc | US | Communication Services | 5.76% |
| Alphabet Inc | US | Communication Services | 5.74% |
| Amazon.com Inc | US | Consumer Discretionary | 5.62% |
| Alibaba Group Holding Ltd | CN | Consumer Discretionary | 5.48% |
| Microsoft Corp | US | Information Technology | 4.56% |
| Tencent Holdings Ltd | CN | Communication Services | 4.45% |
| Netflix Inc | US | Communication Services | 2.27% |
| salesforce.com Inc | US | Information Technology | 2.25% |
| Shopify Inc | CA | Information Technology | 2.04% |
| Delivery Hero SE | DE | Consumer Discretionary | 1.80% |
| MercadoLibre Inc | AR | Consumer Discretionary | 1.79% |
| Snap Inc | US | Communication Services | 1.77% |
| Adobe Inc | US | Information Technology | 1.75% |
| ServiceNow Inc | US | Information Technology | 1.75% |
| Meituan Dianping | CN | Consumer Discretionary | 1.70% |
| Zoom Video Communications Inc | US | Information Technology | 1.64% |
| Twilio Inc | US | Information Technology | 1.63% |
| Bilibili Inc | CN | Communication Services | 1.62% |
| Pinterest Inc | US | Communication Services | 1.57% |
| Atlassian Corp PLC | GB | Information Technology | 1.55% |
| Zscaler Inc | US | Information Technology | 1.50% |
| MongoDB Inc | US | Information Technology | 1.45% |
| Zillow Group Inc | US | Communication Services | 1.42% |
| Smartsheet Inc | US | Information Technology | 1.39% |
| Coupa Software Inc | US | Information Technology | 1.36% |
| Tencent Music Entertainment Gr | CN | Communication Services | 1.32% |
| Okta Inc | US | Information Technology | 1.28% |
| Trade Desk Inc/The | US | Information Technology | 1.27% |
| Elastic NV | US | Information Technology | 1.27% |
| Zendesk Inc | US | Information Technology | 1.25% |
| Anaplan Inc | US | Information Technology | 1.23% |
| Wayfair Inc | US | Consumer Discretionary | 1.23% |
| Takeaway.com NV | NL | Consumer Discretionary | 1.22% |
| Grubhub Inc | US | Consumer Discretionary | 1.22% |
| Workday Inc | US | Information Technology | 1.10% |
| RingCentral Inc | US | Information Technology | 1.09% |
| Xero Ltd | NZ | Information Technology | 1.09% |
| DocuSign Inc | US | Information Technology | 1.08% |
| Avalara Inc | US | Information Technology | 1.04% |
| Wix.com Ltd | IL | Information Technology | 1.04% |
| HubSpot Inc | US | Information Technology | 1.04% |
| Etsy Inc | US | Consumer Discretionary | 1.00% |
| JOYY Inc | CN | Communication Services | 0.99% |
| Zynga Inc | US | Communication Services | 0.95% |
| Splunk Inc | US | Information Technology | 0.93% |
| Spotify Technology SA | SE | Communication Services | 0.92% |
| Just Eat PLC | GB | Consumer Discretionary | 0.83% |
| Match Group Inc | US | Communication Services | 0.82% |
| JD.com Inc | CN | Consumer Discretionary | 0.80% |
| Palo Alto Networks Inc | US | Information Technology | 0.79% |
| Proofpoint Inc | US | Information Technology | 0.75% |
| Trip.com Group Ltd | CN | Consumer Discretionary | 0.65% |
| Twitter Inc | US | Communication Services | 0.62% |
| Zalando SE | DE | Consumer Discretionary | 0.61% |
| IAC/InterActiveCorp | US | Communication Services | 0.57% |
| Intuit Inc | US | Information Technology | 0.54% |
| Fortinet Inc | US | Information Technology | 0.51% |
| Temenos AG | CH | Information Technology | 0.50% |
| Autohome Inc | CN | Communication Services | 0.48% |
| Momo Inc | CN | Communication Services | 0.47% |
| NetEase Inc | CN | Communication Services | 0.46% |
| Rakuten Inc | JP | Consumer Discretionary | 0.43% |
| Booking Holdings Inc | US | Consumer Discretionary | 0.42% |
| VMware Inc | US | Information Technology | 0.42% |
| Baidu Inc | CN | Communication Services | 0.36% |
| Z Holdings Corp | JP | Communication Services | 0.31% |
| Expedia Group Inc | US | Consumer Discretionary | 0.29% |
| VeriSign Inc | US | Information Technology | 0.25% |
| Electronic Arts Inc | US | Communication Services | 0.23% |
| eBay Inc | US | Consumer Discretionary | 0.20% |
| Activision Blizzard Inc | US | Communication Services | 0.16% |
| AUSTRALIAN DOLLAR | Cash | 0.00% | |
| BRITISH POUND | Cash | 0.00% | |
| CANADIAN DOLLAR | Cash | 0.00% | |
| DANISH KRONE | Cash | 0.00% | |
| EURO | Cash | 0.00% | |
| HONG KONG DOLLAR | Cash | 0.00% | |
| ISRAELI SHEKEL | Cash | 0.00% | |
| JAPANESE YEN | Cash | 0.00% | |
| SOUTH KOREA WON | Cash | 0.00% | |
| NEW ZEALAND DOLLAR | Cash | 0.00% | |
| NORWEGIAN KRONE | Cash | 0.00% | |
| SINGAPORE DOLLAR | Cash | 0.00% | |
| SWEDISH KRONA | Cash | 0.00% | |
| SWISS FRANC | Cash | 0.00% | |
| US DOLLAR | Cash | 0.08% |
Companies involved with the internet, technology and e-commerce are exposed to risks associated with rapid advances in technology, obsolescence of current products and services, the finite life of patents and the constant threat of global competition and substitutes.