Research Report: Mega Trends in E-Commerce and Digital Innovation | Q2 2021

September 3, 2021

Internet & E-commerce | Research Papers

Digital transformation of the U.S. economy is accelerating because the pandemic is forcing companies to change, fast. The U.S. economy, we call it “America 2.0”, could get six years of digital transformation packed into six months, with companies adopting technology, selling more directly to customers and expanding their margins. Potential winners could include not just Amazon, but companies growing even faster that enable digital transformation by providing the digital survival tools in cyber-security, data, cloud and other B2B services.

New this Quarter:

  • IAmazon (AMZN) Growth and Performance Trends
  • IFANG Pullback History and Performance
  • IOGIG Portfolio Update. What’s Segments are Growing?

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Investor Type

Revenue Growth, Performance Driver in Tech-Enabled Companies

Global technology companies with higher revenue growth have outperformed over the past 3 years.

Source: Bloomberg Finance L.P. Data as of 6/30/2021.
S&P Global 1200 Information Technology Index.
Past performance does not guarantee future results. The referenced index is shown for informational purposes only and is not meant to represent the Fund. Investors cannot directly invest in an index.

Amazon Investors have been rewarded for tolerating risk

Amazon has had a very strong 10-year run. Investors who held throughout may have experienced total returns exceeding 1600%, over 30% annualized. Though Amazon has had strong sales growth throughout, stock performance was strongest when sales growth was accelerating, highlighting the effectiveness of the metric as a stock performance indicator.

Dating back to 2011, Amazon has suffered a maximum calendar year drawdown of 21% on average but a calendar year return of 39%. Historically, investors have been rewarded for tolerating these ebbs in Amazon stock performance. Market timing is challenging. Long-term buy and hold strategies may be more suitable for most investors.

Source: Bloomberg Finance L.P. Data as of 3/31/2021. S&P Global 1200 Information Technology Index.
Past performance does not guarantee future results. The referenced index is shown for informational purposes only and is not meant to represent the Fund. Investors cannot directly invest in an index.

The “Tech” Stocks that aren’t in Many Tech Indexes

The FANG stocks were either re-classified or were never in “Tech” to begin with.

Average Revenue Growth: Approximately 33%

Source: Bloomberg Finance L.P. Data as of 6/30/2021. Sales – Last FY: Most recent fiscal year revenue. *Sales Growth TTM: Trailing 12 months. For top ten holdings of the OGIG ETF, click here. For informational purposes only. Not meant to represent the Fund.

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