The field of internet-related ETFs is crowded, but there are some standouts, including the Global Internet Giants ETF (OGIG). OGIG just completed its first calendar year on the market last year and did so in impressive fashion.
According to O’Shares, OGIG is a “rules-based ETF designed to provide investors with the means to invest in some of the largest global companies that derive most of their revenue from the Internet and e-commerce sectors that exhibit quality and growth potential.”
Last year, OGIG returned 36.62%, good for one of the top performances among internet ETFs and one that easily topped the widely followed Dow Jones Internet Index.
“OGIG is my top internet ETF growth investment. OGIG gives me over 60 of the world’s largest fast-growing e-commerce and internet companies,” said Kevin O’Leary, Chairman, O’Shares ETFs in a statement. “Did you know that many Tech sector indexes now exclude companies like Facebook and Alphabet?1 So we created OGIG to own very large “tech-enabled” e-commerce and internet companies with great revenue growth.”
Observing OGIG
Some of OGIG’s top portfolio holdings include companies such as Alibaba, Amazon, Facebook, and Alphabet, each of which represents 6- to 6.5-percent of the overall portfolio. Also amongst the index’s 52 holdings are Chinese tech companies like YY, Baidu, 58, and JD. For long-term investors, OGIG’s exposure to ex-US e-commerce and Internet companies is relevant and important.
Not surprisingly, e-commerce is a major driver of long-term potential for OGIG and rival Internet ETFs. OGIG’s structure provides ample leverage to compelling domestic and international e-commerce trends.
“We designed OGIG to own stocks of high quality, large and fast-growing e-commerce and internet companies,” said Connor O’Brien, CEO of O’Shares ETFs. “Revenue growth is an effective quality measure when looking at tech stocks. Some older tech indexes now have slower revenue growth, under 10%. Secular megatrends in e-commerce and internet are driving revenue growth rates of over 30% in many global internet companies. OGIG is an ETF that invests in many of these stocks.”
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Of course, China is a major player in the global e-commerce market, but many traditional Internet ETFs do not feature China exposure. OGIG does.
“The rapid adoption of e-commerce in China has helped fuel regional dominance from Asia-Pacific. In 2010, Asia- Pacific accounted for only a third of total e-commerce. As of last year, that proportion had grown to 60%. North America and Europe comprised a total of 36%, at 21% and 15%, respectively. By 2021, Asia-Pacific’s share of global e-commerce is projected to grow to 67%,” according to O’Shares.
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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.