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3 ETFs to Consider as Retailers Adapt to the New Normal

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The Greek philosopher Heraclitus certainly wasn’t thinking about COVID-19 in the year 2020, but his famous phrase “the only constant in life is change” from around 500 BC can certainly apply today. Retailers are aware of that with the changing tide of consumer demand shifting to online shopping as the global economy adapts to this new normal.

One only has to look at the data that trends towards this move to online retail.

“Chain stores in the U.S. and Canada saw an 80% increase in online sales in April compared with a year earlier, year-on-year rise in online sales in April 2020, according to Bluecore Inc,” a Silicon Angle article noted. “The number of first-time purchases on traditional retailers’ e-commerce sites jumped 119%.  A recent survey of 150 senior executives from midsized and large companies by business consultancy West Monroe Partners LLC found that one-third are setting up ‘significantly new digital/e-commerce capabilities’ in response to the pandemic, making it by far the most common action being undertaken.”

For many retailers who have heavily relied on brick-and-mortar sales, it will be challenging times even in a post-COVID world where adaptation is a necessity in order to survive.

“Closing stores has been a shock,” said Powerfront CEO Hadar Paz. “Retailers have to think more about how to sell without having stores, such as hosting online virtual showrooms with curbside pickup. They need something in between an online and physical visit.”

Here are just a few funds ETF investors can take advantage of when looking at retail options :

  1. Amplify Online Retail ETF (NasdaqGM: IBUY): seeks investment results that generally correspond to the price and yield of the EQM Online Retail Index. The index seeks to measure the performance of global equity securities of publicly traded companies with significant revenue from the online retail business. The index methodology is designed to result in a portfolio that has the potential for capital appreciation.
  2. SPDR S&P Retail ETF (NYSEArca: XRT): seeks to provide investment results that correspond generally to the total return performance of an index derived from the retail segment of a U.S. total market composite index. The index represents the retail segment of the S&P Total Market Index (“S&P TMI”).
  3. ProShares Online Retail ETF (NYSEArca: ONLN): seeks investment results that track the performance of the ProShares Online Retail Index (the index). The index is designed to measure the performance of publicly traded companies that principally sell online or through other non-store sales channels, such as through mobile or app purchases, rather than through “brick and mortar” store locations.

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