Good timing is helpful to any new exchange traded fund, but not all have it. An example of a rookie ETF that immediately appears to be well-timed is the Goldman Sachs Future Consumer Equity ETF (GBUY).
GBUY debuted last week as part of three-ETF suite of new innovative, actively managed funds from Goldman Sachs Asset Management (GSAM). The others are the Goldman Sachs Future Health Care Equity ETF (GDOC) and the Goldman Sachs Future Real Estate and Infrastructure Equity ETF (GREI).
A quick glance at GBUY’s inclusion of “consumer” in its name could compel investors to infer that GBUY could benefit from good timing simply because holiday shopping season is approaching fast. Indeed, that’s a potential catalyst for the fund, but there’s more to the story. Still, for investors that want to leverage GBUY as a holiday shopping play, there’s viability to that thesis.
“Heading into the holiday shopping season, e-commerce is likely to continue to gain share,” writes CFRA Research’s Todd Rosenbluth in a recent note to clients. “U.S. consumers plan to spend approximately $1,000 on gifts, holiday items, and other non-gift purchases for themselves and their families this year, consistent with 2020, according to the annual survey released in October by the National Retail Federation and Prosper Insights & Analytics. Despite broad availability of Covid-19 vaccines, which might entice consumers to return to in-person stores, 57% of respondents plan to purchase items online, consistent with pre-pandemic norms.”
While online retail captivated investors and consumers during the darkest days of the coronavirus pandemic, the truth is that the segment was rapidly growing even prior to the global health crisis. Additionally, it’s still a percentage of overall retail sales, indicating that there’s plenty of room for growth. That says that the new GBUY could be an idea for long-term investors.
“Online retail has been gaining ground in recent years, including outside of the winter holidays, yet there is room for further growth. E-commerce grew to 13.3% of total retail sales in the second quarter of 2021, according to the U.S. Census Bureau, up from 10.5% two years earlier, though it dipped from 15.7% a year ago as the pandemic-induced lockdown has begun to ease,” adds Rosenbluth.
GBUY has another advantage: It sets itself apart from old guard retail ETFs by focusing on the buying trends of Gen Z and millennial consumers. That underscores GBUY’s perch as a thematic ETF, but it’s also compelling long-term potential.
“In recent years, investors have embraced ETFs tied to a long-term theme, such as cloud computing, clean energy, infrastructure, or online retail, because even if an industry’s growth accelerates, there will be some leaders and some laggards,” concludes Rosenbluth.
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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.