Many traditional retailers remain under pressure due to immense competitive threats from Amazon.com Inc. (NASDAQ: AMZN) and other e-commerce firms, but some brick-and-mortar retailers are better-positioned than their rivals to endure the shift to online shopping.
The trend away from traditional department stores and apparel retailers to online shopping destinations should benefit the Amplify Online Retail ETF (NasdaqGM: IBUY), which debuted last year. IBUY, which is comprised of global companies that generate at least 70% of revenue from online or virtual sales, has been one of the best-performing retail ETFs since its inception.
Investors considering other retail exchange traded funds, may want to look at the VanEckVectors Retail ETF (NYSEARCA: RTH). An obvious advantage of RTH is its 18.6% weight to Amazon, which has helped the fund perform admirably this year.
“The secular trends affecting retail – changing shopping habits, the rise of online and discount models – have been well documented and now the market is focused on how retailers manage those changes, and who wins and who loses,” said David Silverman, senior director at Fitch Ratings, in a recent note. “The gulf between the winners and the market share donors is poised to grow as competition heats up.”