The Amplify Online Retail ETF (NasdaqGM: IBUY) confirms online is the place to be for investors considering retail equities. Over the past year, IBUY is higher by more than 78% while oldest retail exchange traded fund is up just 29.6%.
IBUY has been a popular thematic play that targets global companies that generate at least 70% of revenue from online or virtual sales. As the market environment shifts and changes, investors may also have the opportunity to capitalize on the growth potential of the e-commerce segment.
The case for IBUY is twofold. First, it’s getting a big assist from the coronavirus pandemic. Second, online retail was booming longer before COVID-19 arrived.
Some market observers believe changes in consumers’ behavior, which were apparent before the virus, are merely being hastened by the COVID-19 pandemic and that online is where it’s at for retailers – a theme that’s expected to be sticky for years to come.
Going Shopping With IBUY
“IBUY hasn’t just outpaced XRT, but it is also well ahead of broader tech funds, like the SPDR Technology Select Sector ETF (XLK) and the Invesco QQQ Trust Series (QQQ), both of which are up more than 26% this year, according to Morningstar,” reports Teresa Rivas for Barron’s. “The largest tech stocks have done the heavy lifting in terms of market performance in 2020, but even Amazon.com (AMZN)—the biggest gainer among the FAANGs and the one most geared to e-commerce—hasn’t matched IBUY’s run.”
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.
“E-commerce is getting a boost not only because stores are closed, but because the continuing economic uncertainty has caused Americans to search out value even more than before—and online shopping allows for quick price comparisons. Moreover, advances in digital wallets have made it safer and more convenient than ever,” according to Barron’s.
IBUY has an international counterpart, the Amplify International Online Retail ETF (NYSEArca: XBUY). XBUY is an index-based ETF that takes on foreign companies or those outside the U.S. that are expected to benefit from the increased adoption of e-commerce around the world.
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