With large states, such as California and New York, implementing shelter-in-place policies, some analysts and market observers believe internet retailers and related companies are poised to benefit, potentially providing an assist to ETFs such as the Global Internet Giants ETF (OGIG).
According to O’Shares, OGIG is a “rules-based ETF designed to provide investors with the means to invest in some of the largest global companies that derive most of their revenue from the Internet and e-commerce sectors that exhibit quality and growth potential.”
OGIG, which turns two years old in June, is leveraged to the “staying in” theme in both the U.S. and China as Amazon.com (NASDAQ: AMZN), Alibaba (NYSE: BABA) and Tencent Holdings (OTC: TCEHY) are among the fund’s top 10 holdings.
“The Coronavirus (COVID-19) outbreak and recent market volatility is likely stressful for many people,” said O’Shares in a recent note. “As people avoid unnecessary travel and public gatherings, they may turn to e-commerce and digital entertainment companies to shop and relax in the comfort of their homes.”
OGIG is a rules-based ETF designed to provide investors with the means to invest in some of the largest global companies that derive most of their revenue from the Internet and e-commerce sectors that exhibit quality and growth potential.
Netflix (NASDAQ: NFLX), another example of a stay at home stock, is also among OGIG’s top 10 holdings.
“The world’s leading internet streaming company offering TV shows and movies in a variety of genres and languages. Over 160 million subscribers worldwide,” according to O’Shares research.
Observing OGIG
Not surprisingly, e-commerce is a major driver of long-term potential for OGIG and rival Internet ETFs. OGIG’s structure provides ample leverage to compelling domestic and international e-commerce trends.
“Online commerce and digital entertainment platform. It is estimated that over 80% of U.S. households have a Prime account,” according to O’Shares research on Amazon.
Also amongst the index’s holdings are Chinese tech companies like YY, Baidu, and JD. For long-term investors, OGIG’s exposure to ex-US e-commerce and Internet companies is relevant and important.
That international exposure is a critical difference-maker when evaluating OGIG against domestic Internet ETFs and a trait that explains OGIG’s out-performance of legacy funds in the category.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.