Shares of some traditional brick-and-mortar retailers are rebounding this year. For example, the SPDR S&P Retail ETF (NYSEArca: XRT) is up nearly 9% year-to-date.
XRT features exposure to the following corners of the retail industry: Apparel Retail, Automotive Retail, Computer & Electronic Retail, Department Stores, Drug Retail, Food Retailers, General Merchandise Stores, Hypermarkets & Super Centers, Internet & Direct Marketing Retail, and Specialty Stores, according to State Street.
Still, that pales in comparison to the 21% gained by the Amplify Online Retail ETF (NasdaqGM: IBUY), which is comprised of global companies that generate at least 70% of revenue from online or virtual sales.
“IBUY divides online retailers into three broad categories. The majority of the fund consists of traditional retailers like Lands’ End that use the web to sell their own products directly to consumers,” reports Gerrard Cowan for the Wall Street Journal.
IBUY History And The Future
“IBUY began trading on April 20, 2016 and seeks to replicate the price performance of the EQM Online Retail Index (IBUYXT). The rules-based index tracks a globally diverse basket of companies that fall into three online retail categories — marketplace, travel and merchants — all of which must generate 70% of revenue from online or virtual sales,” according to Amplify ETFs.
The ETF features a mix of large-, mid- and small-cap stocks though large- and mid-cap names combine for 81% of its weight. Regardless of market capitalization, data suggest online retail is booming and will continue doing so in the years ahead.
Online retail sales continue to gain ground over traditional retailers, rising over 2000% since 1999. The amount of online buyers around the world estimated to increase 57% from 2014 to 2019; Global online retail sales $1.5 trillion in 2015, expected to rise to $4.1 trillion in 2020.
IBUY’s index equally weights its holdings so neither the fund nor the benchmark are dominated by a stock like Amazon.com Inc. (NASDAQ: AMZN). In fact, Amazon, the largest e-commerce company, currently is not a top 10 holding in IBUY.
“The index tracked by the fund equal-weights its holdings within each of its broad geographical categories, rebalancing twice annually. This means a smaller online retailer can have a similar or greater impact than a giant like Amazon.com,” according to the Journal.
In February, it was reported that IBUY had $200 million in assets under management. That figure has nearly doubled to $396.1 million.
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