The Global X E-commerce ETF (NasdaqGM: EBIZ), one of the newest exchange traded funds (ETFs) dedicated to e-commerce, and rival funds are benefiting this year from a slew of milestones for the online retail industry.
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.
“The total market share of ‘non-store,’ or online U.S. retail sales was higher than general merchandise sales for the first time in history, according to a report from the Commerce Department published earlier this month,” reports CNBC.
EBIZ takes a more diversified approach than some e-commerce ETFs, which are dominated by Amazon.com Inc. (NASDAQ: AMZN). Actually, Amazon is not one of the top 10 holdings in EBIZ. Familiar names among EBIZ’s top 10 holdings include Shopify Inc. (NASDAQ: SHOP) and Etsy Inc. (NASDAQ: ETSY).
Retail Data Says…
Shopping and consumer trends are changing as more buyers rely on the convenience of online retailers to quickly and easily meet their discretionary needs. As the retail landscape changes, investors can also capitalize on the trend through exchange traded funds that target the e-commerce segment.
Online shopping’s “total rose from below 5 percent in the late 1990s to about 12 percent in 2019, according to the Commerce Department,” reports CNBC. “In February, online sales narrowly beat general merchandise stores, including department stores, warehouse clubs and super-centers. Non-store retail sales last month accounted for 11.813 percent of the total, compared with 11.807 percent for general merchandise.”
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, which debuted last November, is up almost 32% year-to-date.
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