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 09/18/2019) | Country | Sector | Fund Weight |
|---|---|---|---|
| Alphabet Inc | US | Communication Services | 6.81% |
| Alibaba Group Holding Ltd | CN | Consumer Discretionary | 6.77% |
| Tencent Holdings Ltd | CN | Communication Services | 6.19% |
| Amazon.com Inc | US | Consumer Discretionary | 5.86% |
| Facebook Inc | US | Communication Services | 5.71% |
| Microsoft Corp | US | Information Technology | 4.34% |
| Pinduoduo Inc | CN | Consumer Discretionary | 2.65% |
| salesforce.com Inc | US | Information Technology | 2.54% |
| Meituan Dianping | CN | Consumer Discretionary | 2.24% |
| Netflix Inc | US | Communication Services | 2.11% |
| Adobe Inc | US | Information Technology | 1.84% |
| Shopify Inc | CA | Information Technology | 1.71% |
| ServiceNow Inc | US | Information Technology | 1.58% |
| Elastic NV | US | Information Technology | 1.57% |
| Snap Inc | US | Communication Services | 1.47% |
| MercadoLibre Inc | AR | Consumer Discretionary | 1.44% |
| Bilibili Inc | CN | Communication Services | 1.40% |
| Atlassian Corp PLC | GB | Information Technology | 1.38% |
| Just Eat PLC | GB | Consumer Discretionary | 1.32% |
| DocuSign Inc | US | Information Technology | 1.29% |
| Workday Inc | US | Information Technology | 1.24% |
| Anaplan Inc | US | Information Technology | 1.24% |
| Twilio Inc | US | Information Technology | 1.20% |
| Coupa Software Inc | US | Information Technology | 1.18% |
| Splunk Inc | US | Information Technology | 1.12% |
| MongoDB Inc | US | Information Technology | 1.09% |
| Okta Inc | US | Information Technology | 1.06% |
| Nutanix Inc | US | Information Technology | 1.05% |
| JD.com Inc | CN | Consumer Discretionary | 1.05% |
| Weibo Corp | CN | Communication Services | 1.04% |
| RingCentral Inc | US | Information Technology | 1.04% |
| Zendesk Inc | US | Information Technology | 1.03% |
| Wayfair Inc | US | Consumer Discretionary | 0.99% |
| Trade Desk Inc/The | US | Information Technology | 0.98% |
| Zynga Inc | US | Communication Services | 0.98% |
| ZOZO Inc | JP | Consumer Discretionary | 0.97% |
| Alibaba Pictures Group Ltd | CN | Communication Services | 0.97% |
| GrubHub Inc | US | Consumer Discretionary | 0.96% |
| NetEase Inc | CN | Communication Services | 0.94% |
| Momo Inc | CN | Communication Services | 0.94% |
| Cargurus Inc | US | Communication Services | 0.93% |
| Spotify Technology SA | SE | Communication Services | 0.91% |
| Autohome Inc | CN | Communication Services | 0.89% |
| Zillow Group Inc | US | Communication Services | 0.87% |
| HubSpot Inc | US | Information Technology | 0.86% |
| Proofpoint Inc | US | Information Technology | 0.84% |
| Etsy Inc | US | Consumer Discretionary | 0.84% |
| Zscaler Inc | US | Information Technology | 0.83% |
| Palo Alto Networks Inc | US | Information Technology | 0.75% |
| Zalando SE | DE | Consumer Discretionary | 0.74% |
| Baidu Inc | CN | Communication Services | 0.71% |
| Ctrip.com International Ltd | CN | Consumer Discretionary | 0.71% |
| Twitter Inc | US | Communication Services | 0.66% |
| Match Group Inc | US | Communication Services | 0.62% |
| New Relic Inc | US | Information Technology | 0.59% |
| Booking Holdings Inc | US | Consumer Discretionary | 0.58% |
| 58.com Inc | CN | Communication Services | 0.56% |
| 2U Inc | US | Information Technology | 0.55% |
| Farfetch Ltd | GB | Consumer Discretionary | 0.53% |
| Ocado Group PLC | GB | Consumer Discretionary | 0.52% |
| VMware Inc | US | Information Technology | 0.51% |
| Fortinet Inc | US | Information Technology | 0.50% |
| Intuit Inc | US | Information Technology | 0.50% |
| IAC/InterActiveCorp | US | Communication Services | 0.49% |
| Dropbox Inc | US | Information Technology | 0.47% |
| Temenos AG | CH | Information Technology | 0.45% |
| Rakuten Inc | JP | Consumer Discretionary | 0.37% |
| Expedia Group Inc | US | Consumer Discretionary | 0.37% |
| GoDaddy Inc | US | Information Technology | 0.36% |
| eBay Inc | US | Consumer Discretionary | 0.22% |
| 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 | 0.02% |
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.