U.S. retail sales jumped this holiday season, fueled by surging e-commerce sales. As online retail becomes a larger part of American consumers’ lives, investors can turn to targeted exchange traded funds that focus on the growing e-commerce segment.
According to Mastercard SpendingPulse, U.S. e-commerce sales climbed 11% during this year’s holiday shopping season from November 1 through December 24, underscoring the ongoing COVID-19 pandemic’s role in shifting consumers’ spending habits, Reuters reports.
“Shoppers were eager to secure their gifts ahead of the retail rush, with conversations surrounding supply chain and labor supply issues sending consumers online and to stores in droves,” senior advisor for Mastercard Steve Sadove said in a statement.
In 2021, holiday e-commerce sales accounted for 20.9% of total retail sales. Mastercard analysts also noted that the sector continues to enjoy growth as consumers capitalize on the ease of browsing and buying in the comfort of their own homes. Specifically, the Mastercard report revealed that jewelry and electronics continued to post phenomenal growth, with jewelry sales increasing 32% and electronics sales advancing 16.2% year-over-year.
As more shoppers look to online deals and internet retail outlets, ETF investors can also capitalize on the growth in e-commerce through theme-specific ETF strategies. For example, the ProShares Decline of the Retail Store ETF (NYSEArca: EMTY) and the ProShares Long Online/Short Stores ETF (NYSEArca: CLIX) both take a short position in brick-and-mortar retail stores to capitalize on weakness in traditional stores. Meanwhile, the ProShares Online Retail ETF (NYSEArca: ONLN) takes on a long position in online retailers.
The Amplify Online Retail ETF (NasdaqGM: 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. Amplify also expanded its line with 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.
The Global X E-commerce ETF (NasdaqGM: EBIZ) reflects the performance of the Solactive E-commerce Index and looks to invest in companies positioned to benefit from the increased adoption of e-commerce as a distribution model, including companies whose principal business is in operating e-commerce platforms, providing e-commerce software and services, and/or selling goods and services online.
Additionally, the Goldman Sachs Motif New Age Consumer ETF (GBUY) holds familiar domestic names like Amazon and China powerhouses like Alibaba Group. The ETF tracks an index that is designed to deliver exposure to companies with common equity securities listed on exchanges in certain markets that may benefit from the ongoing structural shifts in the consumer market due to changes in demographics, technology, and preferences (the “New Age Consumer Theme”).
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