Had enough of the debt ceiling drama? The situation is worsening and has raised the prospect of serious damage to the U.S. economy. That may inspire advisors and investors to diversify their equities, with one option being global internet stocks. U.S. investors may know the likes of Amazon (AMZN) quite well, but foreign markets have internet giants to consider. That presents an avenue to diversify away from the U.S. while still including the likes of AMZN.
The ALPS O’Shares Global Internet Giants ETF (OGIG) offers investors that opportunity via its global internet stocks approach. OGIG tracks the O’Shares Global Internet Giants Index, charging 48 basis points for its exposures. The strategy eyes internet-related firms with growth and quality characteristics, with the latter defined by monthly cash burn rate.
The ETF defines growth meanwhile by revenue growth rate. OGIG’s universe helps it stand out, as well. The ETF builds its universe from the 1,000 largest U.S. and the 500 largest Pacific, European, and emerging markets names.
So what does the strategy hold? Right now, OGIG holds names like MercadoLibre (MELI), an Argentine e-commerce firm, weighted at 1.7%. It also holds Chinese firms Meituan (MPNGY) and Tencent (TCEHY) at 2.25% and 1.6% respectively. Of course, it also leans on some U.S. pillars including Microsoft (MSFT) and AMZN, with the former weighted at 6.7%.
Interestingly, OGIG also offers some exposure to e-commerce names elsewhere in the online consumer spending landscape, like Shopify (SHOP). OGIG has seen its net AUM increase over the last month, up $5.8 million, thanks to price influence. Its performance stands out, returning 21.8% YTD and 5.8% over one month, above its ETF Database Category and Factset Segment Average.
Global internet stocks present an intriguing opportunity if diversified properly. OGIG’s growth and quality screen approach makes it a notable prospect worth watching as the debt ceiling drama continues.
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