An ETF to Watch as Walmart’s eCommerce Sales Skyrocket

Ecommerce has been a primary driver of retail sales for many companies that were able to successfully shift their focus to online shopping like Walmart. The company reported that sales skyrocketed amid a contentious Q2 amid the coronavirus pandemic.

Walmart’s investments in e-commerce, including online grocery delivery and pickup, are continuing to pay off for the retailer. In the company’s Q2 earnings, released this morning, Walmart reported its U.S. e-commerce sales were up 97% — an increase attributed to more customers shopping online during the pandemic, stocking up on household supplies and shopping for grocery items online,” a Tech Crunch article noted. “Today, Walmart offers grocery pickup at 3,450 locations and same-day delivery at 2,730 stores. Since February, it has expanded time slots by 30% to help meet consumer demand.”

The article also added that Walmart “also benefited in the quarter from the impact of U.S. consumers’ government stimulus checks. As those stimulus funds ran out, sales began to normalize. But Walmart’s July comparable sales still grew by more than 4%, the company noted. Walmart’s online marketplace also got a boost from the larger e-commerce bump, with sales up by a triple-digit percentage.”

US E-Commerce Sales Chart

US E-Commerce Sales data by YCharts

Getting Down to EBusiness with ETFs

Social distancing measures amid the Covid-19 pandemic have forced even the most ardent brick-and-mortar retail supporters towards online purchasing. As such, an online retail boom will only fan the flames for the hot Global X Funds – Global X E-commerce ETF (EBIZ).

EBIZ seeks 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.

EBIZ offers investors:

  • High Growth Potential: EBIZ enables investors to access high growth potential through companies that are positioned to benefit from the increased adoption of E-commerce as a distribution model.
  • Unconstrained Approach: EBIZ’s composition transcends classic sector, industry, and geographic classifications by tracking an emerging consumer theme.
  • ETF Efficiency: In a single trade, EBIZ delivers access to dozens of companies with high exposure to the E-commerce theme.

ETF investors looking for funds with heavy holdings of Walmart can look to the  Consumer Staples Select SPDR (XLP). XLP seeks to provide investment results that correspond generally to the price and yield performance of publicly traded equity securities of companies in the Consumer Staples Select Sector Index.

In seeking to track the performance of the index, the fund employs a replication strategy. It generally invests substantially all, but at least 95%, of its total assets in the securities comprising the index. The index includes securities of companies from the following industries: food and staples retailing; household products; food products; beverages; tobacco; and personal products.

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