The Goldman Sachs Future Consumer Equity ETF (GBUY) is one of roughly 500 new exchange traded funds that launched this year. While that implies a littered field in which it’s difficult for individual funds to stand out, GBUY has the makings of a rookie ETF winner.
Indeed, the combination of a November debut and an emphasis on emerging consumer trends could be enough to stoke interest in GBUY. Fortunately, there’s a deeper story here — one that highlights a long runway for growth when it comes to e-commerce.
“U.S. e-commerce sales are on track to exceed $1 trillion for the first time next year, as sales growth plateaus but total purchases remain far above pre-pandemic levels, according to a recent forecast by eMarketer. E-commerce sales grew by 32.4% between 2019 and 2020, reflecting the abrupt shift to online shopping, working and learning during first waves of the pandemic. The growth rate fell to an estimated 16.1% between 2020 and 2021 and is expected to remain near that level for the next two years,” notes S&P Global Market Intelligence.
When it comes to GBUY, investors shouldn’t make the mistake of getting caught up in the fact that the internet’s percentage of overall retail sales dipped this year. Rather, the points of emphasis ought to be that e-commerce is maintaining attractive growth rates and still represents a small slice of total retail sales.
Moreover, GBUY is levered to the theme of shifting consumer trends. Said another way, the coronavirus pandemic altered the way people shop, and those alterations are likely permanent.
“A 451 Research survey fielded in October found that while some shoppers reported changing their habits due to the pandemic, convenience outranked COVID-19 as a key factor driving a portion of holiday shopping online,” notes S&P Global. “About one-fifth of respondents to 451’s Voice of the Connected User Landscape: Connected Customer, Holiday Experiences survey said most of their in-store shopping had shifted online as a result of COVID-19, and another one-third said some of their shopping had shifted.”
The actively managed GBUY holds 43 stocks, including a 7% allocation to Amazon.com (NASDAQ:AMZN), the largest domestic e-commerce company.
While Amazon has been a sluggish performer this year, analysts believe that investments which the company made prior to the pandemic will pay off next year, as its booming logistics operation helps the company reduce dependence on outside shipping vendors.
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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.