Online Still Looks Good For Retail ETFs | ETF Trends

Data continue confirming the positive trajectory for e-commerce and online retail and the related ETFs, such as the ProShares Online Retail ETF (NYSEArca: ONLN).

ONLN tracks the ProShares Online Retail Index. That benchmark includes companies that principally sell online or through other non-store channels, such as mobile or app purchases, rather than through brick-and-mortar store locations. Component holdings must be classified as an online retailer, an e-commerce retailer, or an internet or direct marketing retailer, according to standard industry classification systems.

Earlier this week, the Commerce Department said e-commerce sales in the fourth quarter increased 2.6% and for all of 2019, e-commerce accounted for 11.4% of U.S. retail sales.

“The Census Bureau of the Department of Commerce announced today that the estimate of U.S. retail e-commerce sales for the fourth quarter of 2019, adjusted for seasonal variation, but not for price changes, was $158.0 billion, an increase of 2.6 percent(±0.7%) from the third quarter of 2019,” according to the Commerce Department.

Observing ONLN

Shopping and consumer trends are changing as more buyers rely on the convenience of online retailers to quickly and easily meet their discretionary needs. As the retail landscape changes, investors can also capitalize on the trend through ETFs that target the e-commerce segment. Demographic trends are driving those shifts.

“Total retail sales for the fourth quarter of 2019 were estimated at $1,386.2 billion, an increase of 0.4 percent (±0.2%) from the third quarter of 2019. The fourth quarter 2019 e-commerce estimate increased 16.7 percent (±1.1%) from the fourth quarter of 2018 while total retail sales increased 3.8 percent (±0.4%) in the same period. E-commerce sales in the fourth quarter of 2019 accounted for 11.4 percent of total sales,” notes the Commerce Department.

By 2020, an estimated 2 billion people are expected to be digital shoppers or a 19% jump from 2018 levels, as more people, notably from emerging economies where barely half the population is online, gain access to the internet. Almost one-third of consumers are already shopping online at least weekly and 75% at least once a month.

“Total sales for 2019 were estimated at $601.7 billion, an increase of 14.9 percent (±1.1%) from 2018. Total retail sales in 2019 increased by 3.4 percent (±0.4%) from 2018. E-commerce sales in 2019 accounted for 11.0 percent of total sales. E-commerce sales in 2018 accounted for 9.9 percent of total sales,” notes the Commerce Department.

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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.