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Profit from Retail Disruption with These ETFs

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  • (1:00) - What Has Caused The Disruption in the Retail Industry?
  • (3:15) - What Are The New Growth Trends In Retail?
  • (5:00) - ProShares Online Retail ETF: ONLN
  • (9:50) - Weakened Brick and Mortar Retail 
  • (12:55) - Pro Shares Long Online/Short Stores ETF: CLIX
  • (14:05) - How Can Investors Benefit From These Products?
  • (17:00) - Episode Roundup: Podcast@Zacks.com

In this episode of ETF Spotlight, I talked with Kieran Kirwan, Senior Investment Strategist at ProShares.

ProShares is well known for its dividend growth, alternative and leveraged and inverse ETFs. They also have a suite of products focused on retail disruption.

Americans are spending more thanks to tax cuts, tightening labor markets and rising stock prices. And a growing number of consumers now prefer to shop online. Shifting consumer preferences and technology advances have resulted in disruptive changes in the retail space.

First off, we discussed how the retail industry is undergoing massive disruption.

Over the past decade, global e-commerce has been growing at an average rate of 20% per year, according to the Economist. But the trend is just getting started.  Online shopping amounts to less than 10% of the world’s retail spending, so there is tremendous room for growth.

Kieran explained why these growth trends could continue.

Last month, ProShares launched the Online Retail ETF (ONLN - Free Report) , which focuses on global e-commerce companies.

And while the Amplify Online Retail ETF (IBUY - Free Report) is equally weighted, ONLN focuses on the largest players in the space like Amazon (AMZN - Free Report) and Alibaba (BABA - Free Report) . Amazon gets almost 25% of the portfolio weighting and Alibaba about 15%.

As online sales are growing, brick and mortar stores are witnessing declining sales. Kieran highlighted some of the most visible indicators of the weakness in traditional retail.

ProShares also offers the Long Online/Short Stores ETF (CLIX - Free Report) that provides long exposure to online retailers and short exposure to traditional brick and mortar retailers. And the ProShares Decline of the Retail Store ETF (EMTY - Free Report) provides inverse exposure to bricks-and-mortar retailers.

What do investors need to know about these ETFs? Find out on the podcast.

Finally, we discussed how investors could use these strategies in a portfolio.

If you want to learn more about these ETF please visit proshares.com.

And please visit the ETF sectionof zacks.com for more information on these and other ETFs.

Make sure to tune in for our next podcast. If you have any comments or questions, please email podcast@zacks.com.

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