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Join the E-Commerce Party This Year With These ETFs
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Steep discounts during the Cyber Week lured U.S. shoppers to splurge about $38 billion online, signaling a strong holiday shopping season even as economic uncertainty lingered. U.S. Cyber Monday sales touched a record $12.4 billion on big discounts, per Adobe Analytics, quoted on the Print. Online consumer spending soared 9.6% on Monday from the $11.3 billion seen last year, outdoing Adobe’s initial expectations for a 6.1% rise to $12 billion (read: ETFs From 6 Investing Areas to Gain from Cyber Week Sales).
Plus, according to the latest Mastercard SpendingPulse, Black Friday sales are up 2.5% year over year, with e-commerce giving overall sales a major boost. The report says that e-commerce sales rose a solid 8.5% year over year as customers avoided crowds. Adobe Analytics also reported an 8.5% jump in online spending on Black Friday, totaling $9.8 billion. Several sports events were broadcast on Black Friday, boosting e-commerce sales as viewers opted for online shopping. Mobile shopping reached a total of $5.3 billion.
Optimistic Holiday Retail Sales Outlook
Before the start of holiday season, Mastercard SpendingPulse estimated a 3.7% year-over-year increase between November 1 and December 24, excluding automotive sales. E-commerce and online sales were expected to grow by 6.7% and 2.9%, respectively.
Deloitte's research firm predicted total holiday retail sales in 2023 to range between $1.54 to $1.56 trillion during the November to January period, indicating a year-over-year improvement of 3.5% to 4.6%. E-commerce sales within this total were projected to reach $278 billion to $284 billion, reflecting a year-over-year increase of 10.3% to 12.8%.
Bain & Company foresaw a 3% year-over-year growth in nominal U.S. retail sales in November and December, totaling about $915 billion. Notably, 90% of this growth was expected to come from non-store sales (read: Why You Should Tap Fintech ETFs & Stocks in the Holiday Season).
Why to Buy E-Commerce ETFs?
E-commerce has revolutionized the entire shopping pattern. The online retail industry has been growing steadily over the past two decades. The COVID-19 pandemic accelerated this trend as many consumers shifted to online shopping due to lockdowns and social distancing measures. Since then, shopping online has become a common practice. Modern consumers are increasingly valuing convenience, variety, and personalization—all attributes of online shopping. Steep discount on the online platform is an added advantage.
E-commerce is continually transforming as underlying technologies progress. On one end, we have ever-evolving and more potent user devices, while on the opposite end, advanced AI-driven software platforms enhance transaction capabilities, ensuring greater user contentment.
New technologies, including augmented reality (AR), virtual reality (VR), and machine learning algorithms, are enhancing the online shopping experience. As these technologies become more prevalent, they could drive further growth in the sector.
Within the Retail sector, the Zacks-defined Internet-Commerce industry is currently in the top 15% of the Zacks Industry Rank. Year to date, the industry has provided 47% returns. Since it is ranked in the top half of Zacks Ranked Industries, we expect the e-commerce industry to outperform the market over the next 3 to 6 months.
Against this backdrop, below we highlight a few online retail ETFs that could be bought currently.
The EQM Online Retail Index utilizes a rules based methodology to select a globally diverse group of companies with 70% or more of revenue from online and virtual sales. The fund charges 65 bps in fees.
The ProShares Online Retail Index is a specialized retail index that tracks retailers that principally sell online or through other non-store channels. The fund charges 58 bps in fees.
ProShares Decline of the Retail Store ETF (EMTY - Free Report)
The underlying Solactive-ProShares Bricks and Mortar Retail Store Index is the first comprehensive, public securities index composed solely of traditional retailers, and is positioned to potentially become an industry standard for measuring the health of bricks and mortar retailers. The fund charges 65 bps in fees.
The underlying S-Network Global E-Commerce Index provides exposure to companies with securities listed on recognized global securities exchanges that are principally engaged in the global e-commerce industry, including the online retail, online marketplace, content navigation and e-commerce infrastructure business segments. The fund charges 60 bps in fees.
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Join the E-Commerce Party This Year With These ETFs
Steep discounts during the Cyber Week lured U.S. shoppers to splurge about $38 billion online, signaling a strong holiday shopping season even as economic uncertainty lingered. U.S. Cyber Monday sales touched a record $12.4 billion on big discounts, per Adobe Analytics, quoted on the Print. Online consumer spending soared 9.6% on Monday from the $11.3 billion seen last year, outdoing Adobe’s initial expectations for a 6.1% rise to $12 billion (read: ETFs From 6 Investing Areas to Gain from Cyber Week Sales).
Plus, according to the latest Mastercard SpendingPulse, Black Friday sales are up 2.5% year over year, with e-commerce giving overall sales a major boost. The report says that e-commerce sales rose a solid 8.5% year over year as customers avoided crowds. Adobe Analytics also reported an 8.5% jump in online spending on Black Friday, totaling $9.8 billion. Several sports events were broadcast on Black Friday, boosting e-commerce sales as viewers opted for online shopping. Mobile shopping reached a total of $5.3 billion.
Optimistic Holiday Retail Sales Outlook
Before the start of holiday season, Mastercard SpendingPulse estimated a 3.7% year-over-year increase between November 1 and December 24, excluding automotive sales. E-commerce and online sales were expected to grow by 6.7% and 2.9%, respectively.
Deloitte's research firm predicted total holiday retail sales in 2023 to range between $1.54 to $1.56 trillion during the November to January period, indicating a year-over-year improvement of 3.5% to 4.6%. E-commerce sales within this total were projected to reach $278 billion to $284 billion, reflecting a year-over-year increase of 10.3% to 12.8%.
Bain & Company foresaw a 3% year-over-year growth in nominal U.S. retail sales in November and December, totaling about $915 billion. Notably, 90% of this growth was expected to come from non-store sales (read: Why You Should Tap Fintech ETFs & Stocks in the Holiday Season).
Why to Buy E-Commerce ETFs?
E-commerce has revolutionized the entire shopping pattern. The online retail industry has been growing steadily over the past two decades. The COVID-19 pandemic accelerated this trend as many consumers shifted to online shopping due to lockdowns and social distancing measures. Since then, shopping online has become a common practice. Modern consumers are increasingly valuing convenience, variety, and personalization—all attributes of online shopping. Steep discount on the online platform is an added advantage.
E-commerce is continually transforming as underlying technologies progress. On one end, we have ever-evolving and more potent user devices, while on the opposite end, advanced AI-driven software platforms enhance transaction capabilities, ensuring greater user contentment.
New technologies, including augmented reality (AR), virtual reality (VR), and machine learning algorithms, are enhancing the online shopping experience. As these technologies become more prevalent, they could drive further growth in the sector.
Within the Retail sector, the Zacks-defined Internet-Commerce industry is currently in the top 15% of the Zacks Industry Rank. Year to date, the industry has provided 47% returns. Since it is ranked in the top half of Zacks Ranked Industries, we expect the e-commerce industry to outperform the market over the next 3 to 6 months.
Against this backdrop, below we highlight a few online retail ETFs that could be bought currently.
ETFs in Focus
Amplify Online Retail ETF (IBUY - Free Report)
The EQM Online Retail Index utilizes a rules based methodology to select a globally diverse group of companies with 70% or more of revenue from online and virtual sales. The fund charges 65 bps in fees.
ProShares Online Retail ETF (ONLN - Free Report)
The ProShares Online Retail Index is a specialized retail index that tracks retailers that principally sell online or through other non-store channels. The fund charges 58 bps in fees.
ProShares Decline of the Retail Store ETF (EMTY - Free Report)
The underlying Solactive-ProShares Bricks and Mortar Retail Store Index is the first comprehensive, public securities index composed solely of traditional retailers, and is positioned to potentially become an industry standard for measuring the health of bricks and mortar retailers. The fund charges 65 bps in fees.
First Trust S-Network E-Commerce ETF (ISHP - Free Report)
The underlying S-Network Global E-Commerce Index provides exposure to companies with securities listed on recognized global securities exchanges that are principally engaged in the global e-commerce industry, including the online retail, online marketplace, content navigation and e-commerce infrastructure business segments. The fund charges 60 bps in fees.