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Online Spending to Hit Record in 2022: 5 ETFs to Surge
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The COVID-19 pandemic has driven e-commerce and changed the consumer landscape to a purely digital one. Buoyed by this trend, shoppers spent $138 billion online in the first two months of 2022. Online spending is expected to hit a record $1 trillion in 2022, the highest level ever, per a new study by Adobe. This represents a jump of 13% from last year.
Investors seeking to tap the booming online sales trend could consider e-commerce ETFs like Amplify Online Retail ETF (IBUY - Free Report) , ProShares Online Retail ETF (ONLN - Free Report) , Global X E-commerce ETF (EBIZ - Free Report) , First Trust Dow Jones Internet Index (FDN - Free Report) and Invesco NASDAQ Internet ETF (PNQI - Free Report) . Any of these could be compelling picks to play the trend.
The record spending is the result of higher prices rather than purchases. The ongoing global supply chain bottlenecks and rising inflation have pushed up the online prices for almost everything.
Inflation has been on an incredible surge. The Consumer Price Index, the most widely used measure of inflation, reached the highest level in 40 years in February while the Producer Price Index, which tracks what America's producers get paid for their goods and services on average over time, climbed double digits last month. Meanwhile, the 30-year breakeven rate — a bond-market gauge of inflation expectations — hit 2.60% last week, the highest since 2013 (read: Inflation Beneficiary ETFs in Focus as Prices Soar).
Online grocery shopping will provide the biggest boost to shopping this year with Americans expected to spend around $85 billion in this category after $79.2 billion spend in 2021. This was followed by electronics and apparels spending of $174 billion and $130 billion, respectively. Electronics were the largest e-commerce category last year that drove $165 billion in online expenditure, up 8% year over year, while apparels spending just grew 9.1% year over year to $115.8 billion.
Amplify Online Retail ETF offers global exposure to companies that derive 70% or more revenues from online and virtual retail by tracking the EQM Online Retail Index. IBUY holds 79 stocks in its basket with none accounting for more than 3.7% of assets. Amplify Online Retail ETF has the largest allocation in traditional retail at 50% followed by 40% in the marketplace.
Amplify Online Retail ETF has attracted $330.8 million in its asset base and charges 65 bps in annual fees. IBUY trades in an average daily volume of 81,000 shares.
ProShares Online Retail ETF offers exposure to companies that principally sell online or through other non-store channels, and then zeros in on the companies that reshape the retail space. It tracks the ProShares Online Retail Index, holding 39 stocks in its basket. ONLN is highly concentrated on the top two firms while the other firms hold no more than 5.1% of assets. American firms make up three-fourth of the portfolio, while Chinese firms account for 16.8% share.
Global X E-commerce ETF invests in companies positioned to benefit from the increased adoption of e-commerce as a distribution model, including companies whose principal business is in operating e-commerce platforms, providing related software and services, and/or selling goods and services online. It follows the Solactive E-commerce Index, holding 41 stocks in its basket.
Global X E-commerce ETF has accumulated $133.7 million in its asset base and charges 50 bps in annual fees. The ETF sees an average daily volume of 23,000 shares.
First Trust Dow Jones Internet Index Fund (FDN - Free Report)
First Trust Dow Jones Internet Index Fund follows the Dow Jones Internet Composite Index, giving investors exposure to the broad Internet industry. It holds about 42 stocks in its basket with a double-digit concentration on the top firm. Other firms account for no more than 6.2% share.
First Trust Dow Jones Internet Index Fund is the most popular and liquid ETFs in the broad technology space with AUM of $6.2 billion and an average daily volume of around 553,000 shares. FDN charges 51 bps in fees per year and has a Zacks ETF Rank #3 (Hold).
Invesco NASDAQ Internet ETF follows the Nasdaq CTA Internet Index, which measures the performance of companies engaged in Internet-related businesses listed on the New York Stock Exchange, NYSE American, Cboe Exchange or The Nasdaq Stock Market. The product holds 81 stocks in its basket, with double-digit exposure each in interactive media & services, Internet & direct marketing retail and software (read: Bet on Top-Ranked Tech ETFs to Ride the Recent Rebound Rally).
Invesco NASDAQ Internet ETF has amassed $569.6 million in its asset base and charges 60 bps in fees per year. The fund trades in a light volume of 40,000 shares and has a Zacks ETF Rank #3.
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Online Spending to Hit Record in 2022: 5 ETFs to Surge
The COVID-19 pandemic has driven e-commerce and changed the consumer landscape to a purely digital one. Buoyed by this trend, shoppers spent $138 billion online in the first two months of 2022. Online spending is expected to hit a record $1 trillion in 2022, the highest level ever, per a new study by Adobe. This represents a jump of 13% from last year.
Investors seeking to tap the booming online sales trend could consider e-commerce ETFs like Amplify Online Retail ETF (IBUY - Free Report) , ProShares Online Retail ETF (ONLN - Free Report) , Global X E-commerce ETF (EBIZ - Free Report) , First Trust Dow Jones Internet Index (FDN - Free Report) and Invesco NASDAQ Internet ETF (PNQI - Free Report) . Any of these could be compelling picks to play the trend.
The record spending is the result of higher prices rather than purchases. The ongoing global supply chain bottlenecks and rising inflation have pushed up the online prices for almost everything.
Inflation has been on an incredible surge. The Consumer Price Index, the most widely used measure of inflation, reached the highest level in 40 years in February while the Producer Price Index, which tracks what America's producers get paid for their goods and services on average over time, climbed double digits last month. Meanwhile, the 30-year breakeven rate — a bond-market gauge of inflation expectations — hit 2.60% last week, the highest since 2013 (read: Inflation Beneficiary ETFs in Focus as Prices Soar).
Online grocery shopping will provide the biggest boost to shopping this year with Americans expected to spend around $85 billion in this category after $79.2 billion spend in 2021. This was followed by electronics and apparels spending of $174 billion and $130 billion, respectively. Electronics were the largest e-commerce category last year that drove $165 billion in online expenditure, up 8% year over year, while apparels spending just grew 9.1% year over year to $115.8 billion.
ETFs to Surge
Amplify Online Retail ETF (IBUY - Free Report)
Amplify Online Retail ETF offers global exposure to companies that derive 70% or more revenues from online and virtual retail by tracking the EQM Online Retail Index. IBUY holds 79 stocks in its basket with none accounting for more than 3.7% of assets. Amplify Online Retail ETF has the largest allocation in traditional retail at 50% followed by 40% in the marketplace.
Amplify Online Retail ETF has attracted $330.8 million in its asset base and charges 65 bps in annual fees. IBUY trades in an average daily volume of 81,000 shares.
ProShares Online Retail ETF (ONLN - Free Report)
ProShares Online Retail ETF offers exposure to companies that principally sell online or through other non-store channels, and then zeros in on the companies that reshape the retail space. It tracks the ProShares Online Retail Index, holding 39 stocks in its basket. ONLN is highly concentrated on the top two firms while the other firms hold no more than 5.1% of assets. American firms make up three-fourth of the portfolio, while Chinese firms account for 16.8% share.
ProShares Online Retail ETF has accumulated $419.3 million in its asset base and charges 58 bps in annual fees. ONLN trades in an average daily volume of 103,000 shares (read: Inflation Fear Overblown? 4 Retail Sector ETFs & Stocks Look Stout).
Global X E-commerce ETF (EBIZ - Free Report)
Global X E-commerce ETF invests in companies positioned to benefit from the increased adoption of e-commerce as a distribution model, including companies whose principal business is in operating e-commerce platforms, providing related software and services, and/or selling goods and services online. It follows the Solactive E-commerce Index, holding 41 stocks in its basket.
Global X E-commerce ETF has accumulated $133.7 million in its asset base and charges 50 bps in annual fees. The ETF sees an average daily volume of 23,000 shares.
First Trust Dow Jones Internet Index Fund (FDN - Free Report)
First Trust Dow Jones Internet Index Fund follows the Dow Jones Internet Composite Index, giving investors exposure to the broad Internet industry. It holds about 42 stocks in its basket with a double-digit concentration on the top firm. Other firms account for no more than 6.2% share.
First Trust Dow Jones Internet Index Fund is the most popular and liquid ETFs in the broad technology space with AUM of $6.2 billion and an average daily volume of around 553,000 shares. FDN charges 51 bps in fees per year and has a Zacks ETF Rank #3 (Hold).
Invesco NASDAQ Internet ETF (PNQI - Free Report)
Invesco NASDAQ Internet ETF follows the Nasdaq CTA Internet Index, which measures the performance of companies engaged in Internet-related businesses listed on the New York Stock Exchange, NYSE American, Cboe Exchange or The Nasdaq Stock Market. The product holds 81 stocks in its basket, with double-digit exposure each in interactive media & services, Internet & direct marketing retail and software (read: Bet on Top-Ranked Tech ETFs to Ride the Recent Rebound Rally).
Invesco NASDAQ Internet ETF has amassed $569.6 million in its asset base and charges 60 bps in fees per year. The fund trades in a light volume of 40,000 shares and has a Zacks ETF Rank #3.