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Amplify Chalks Out International Plans With Online Retail ETF
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Amplify ETF Trust is known for its successful ETF Amplify Online Retail ETF (IBUY - Free Report) , which hit the market in April 2016 and has amassed about $562.0 million in assets. The fund, which gives investors exposure to the U.S. market, has added more than 44% in the past year. Now to repeat the success on the international front, the issuer planned to launch International Online Retail ETF XBUY(read: ETF & Stock Picks to Defy Subdued US Retail Sales in August).
Inside XBUY
The fund will look to focus on foreign companies that generate 90% or more of their revenues from online sales. The underlying index’s selection universe considers all non-U.S. securities listed on exchanges.
Index constituents are primarily weighted equally. Index constituents are then separated into two liquidity pools. The first liquidity pool is formed of the components ranked in the top 80% of liquidity, while the second liquidity pool is made up of constituents ranked in the bottom 20% of liquidity.
The Index’s exposure to a single country is limited at 25%. If the Index’s exposure to a specific country crosses 25%, each security of that country has its weight reduced on a pro rata basis so that the total exposure to that country comes down to 25%.
How Does It Fit In a Portfolio?
The ETF could be intriguing for investors seeking to benefit from the changing retail shopping scenario, which is increasingly shifting from bricks-and-mortar stores to digital.
Per Statista, e-commerce share of global retail sales will likely go up to 17.5% in 2021 from 10.2% in 2017. Last year, global retail ecommerce sales were $2.304 trillion, marking a 24.8% year-over-year increase, per eMarketer.
Mobile was the main driving factor, as mcommerce made up about 58.9% of digital sales, a huge leap in share from 40.2% in 2015. By 2021, mcommerce is likely to form about 72.9% of the ecommerce market.
Over the past decade, worldwide e-commerce has been growing at an average rate of 20% a year, according to Economist. Still, per a report by Deloitte, about 10% of global retail sales are now made online. Even in South Korea, the country which does the maximum retail sales online, share of online trade to total is just 18%, according to Euromonitor. So, there is huge room for growth globally (read: Profit from Retail Disruption with These ETFs).
Will It See Success?
The fund should see uninterrupted success like IBUY. Though there aren't many online retail ETFs focused solely on international online retail companies, XBUY may face competition from the likes of ProShares Long Online/Short Stores ETF (CLIX - Free Report) and ProShares Online Retail ETF (ONLN - Free Report) as well as IBUY. Notably, IBUY has about 82% exposure to North America, per xtf.com.
CLIX charges 65 bps in fees while ONLN charges 58 bps. CLIX has accumulated $65.0 million in AUM since its debut last November while ONLN has amassed about $23.4 million since making an entry this July. So, it is clear no online retail ETF falls short of asset accumulation. The new fund should also make a killing, if approved. This is especially true as the fund is being presented to investors with a tweak, i.e., international online retailing. This uniqueness should make it see more success.
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Amplify Chalks Out International Plans With Online Retail ETF
Amplify ETF Trust is known for its successful ETF Amplify Online Retail ETF (IBUY - Free Report) , which hit the market in April 2016 and has amassed about $562.0 million in assets. The fund, which gives investors exposure to the U.S. market, has added more than 44% in the past year. Now to repeat the success on the international front, the issuer planned to launch International Online Retail ETF XBUY (read: ETF & Stock Picks to Defy Subdued US Retail Sales in August).
Inside XBUY
The fund will look to focus on foreign companies that generate 90% or more of their revenues from online sales. The underlying index’s selection universe considers all non-U.S. securities listed on exchanges.
Index constituents are primarily weighted equally. Index constituents are then separated into two liquidity pools. The first liquidity pool is formed of the components ranked in the top 80% of liquidity, while the second liquidity pool is made up of constituents ranked in the bottom 20% of liquidity.
The Index’s exposure to a single country is limited at 25%. If the Index’s exposure to a specific country crosses 25%, each security of that country has its weight reduced on a pro rata basis so that the total exposure to that country comes down to 25%.
How Does It Fit In a Portfolio?
The ETF could be intriguing for investors seeking to benefit from the changing retail shopping scenario, which is increasingly shifting from bricks-and-mortar stores to digital.
Per Statista, e-commerce share of global retail sales will likely go up to 17.5% in 2021 from 10.2% in 2017. Last year, global retail ecommerce sales were $2.304 trillion, marking a 24.8% year-over-year increase, per eMarketer.
Mobile was the main driving factor, as mcommerce made up about 58.9% of digital sales, a huge leap in share from 40.2% in 2015. By 2021, mcommerce is likely to form about 72.9% of the ecommerce market.
Over the past decade, worldwide e-commerce has been growing at an average rate of 20% a year, according to Economist. Still, per a report by Deloitte, about 10% of global retail sales are now made online. Even in South Korea, the country which does the maximum retail sales online, share of online trade to total is just 18%, according to Euromonitor. So, there is huge room for growth globally (read: Profit from Retail Disruption with These ETFs).
Will It See Success?
The fund should see uninterrupted success like IBUY. Though there aren't many online retail ETFs focused solely on international online retail companies, XBUY may face competition from the likes of ProShares Long Online/Short Stores ETF (CLIX - Free Report) and ProShares Online Retail ETF (ONLN - Free Report) as well as IBUY. Notably, IBUY has about 82% exposure to North America, per xtf.com.
CLIX charges 65 bps in fees while ONLN charges 58 bps. CLIX has accumulated $65.0 million in AUM since its debut last November while ONLN has amassed about $23.4 million since making an entry this July. So, it is clear no online retail ETF falls short of asset accumulation. The new fund should also make a killing, if approved. This is especially true as the fund is being presented to investors with a tweak, i.e., international online retailing. This uniqueness should make it see more success.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>