Helping investors capitalize on the growth in the online retail business, Global X rolled out a targeted e-commerce ETF.
Global X launched the Global X E-commerce ETF (NasdaqGM: EBIZ), which has a 0.68% expense ratio.
The Global X E-commerce ETF tries to reflect the performance of the Solactive E-commerce Index, which include companies that are positioned to benefit from the increased adoption of e-commerce as a distribution model, including but not limited to companies whose principal business is in operating e-commerce platforms, providing e-commerce software and services, and/or selling goods and services online, according to the fund’s prospectus.
Solactive implements a proprietary Natural Language Processing (NLP) engine called ARTIS® (Algorithmic Theme Identification System), which identifies and ranks companies with direct exposure to the e-commerce industry based on filings, disclosures and other public information. Companies identified are further reviewed based on revenue related to e-commerce activities.
“Undoubtedly, it is safe to say that E-commerce will further define our consumption habits, which are focusing largely on the immediate availability of goods. As an innovative index provider, it is our pursuit to not only find the obvious but also take on different directions and perspectives on how to identify new sources for valuable index concepts,” Timo Pfeiffer, Head of Research at Solactive, commented in a note.
The e-commerce segment is a quickly growing consumer sector. In 2017, 2.73 billion online shoppers accounted for sales of over $2.3 trillion. Looking ahead, the user base is expected to grow to 3.1 billion people globally by 2021. Meanwhile, online retail revenues are expected to surge to $4.88 trillion by 2021.
EBIZ’s top holdings include Rakuten 5.0%, Etsy 4.9%, Netease 4.6%, Alibaba Group 4.5% and Shopify 4.4%.
Sub-sector weights include internet retail 71.0%, interactive media and services 10.7%, internet services and infrastructure 4.5%, internet home entertainment 4.3%, home improvement retail 4.2%, research & consulting services 3.9%, application software 1.1% and advertising 0.2%.
Country weights include U.S. 48.7%, China 24.2%, Japan 8.7%, U.K. 8.0%, Canada 4.2%, Argentina 4.0%, Germany 1.7%, South Korea 0.3% and Taiwan 0.3%.
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