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E-Commerce ETFs Benefit from Record Online Holiday Sales

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Online retail-related ETFs are enjoying a great winter as U.S. consumers spent more online over this year’s holiday shopping season, with e-commerce sales reaching a new record.

The traditional winter holiday shopping season is a key period for the retail sector, accounting for up to 40% of annual sales, Reuters reports.

Breaking down the retail segment, e-commerce sales this year made up 14.6% of the total, or up 18.8% for the same period last year, according to Mastercard’s recent data based on retail sales from November 1 through Christmas Eve. Overall holiday retail sales, excluding autos, increased by 3.4%.

“E-commerce sales hit a record high this year with more people doing their holiday shopping online,” Steve Sadove, senior adviser for Mastercard, told Reuters.

“Due to a later than usual Thanksgiving holiday, we saw retailers offering omnichannel sales earlier in the season, meeting consumers’ demand for the best deals across all channels and devices,” Sadove added, referring to how Thanksgiving landed on November 28 this year, or a week later than last year’s November 22 date.

Mastercard spokesman William Tsang, though, did note that 2018’s 5.1% growth in total sales still eclipsed this year’s holiday sales growth.

Capitalizing On The Growth In E-Commerce

As more shoppers look to online deals and internet retail outlets, ETF investors can also capitalize on the growth in e-commerce through theme-specific ETF strategies. For example, the ProShares Decline of the Retail Store ETF (NYSEArca: EMTY) and ProShares Long Online/Short Stores ETF (NYSEArca: CLIX) both take a short position in brick-and-mortar retail stores to capitalize on weakness in traditional stores. Meanwhile, the ProShares Online Retail ETF (NYSEArca: ONLN) takes on a long position in online retailers.

The Amplify Online Retail ETF (NasdaqGM: IBUY) has been a popular thematic play that targets global companies that generate at least 70% of revenue from online or virtual sales. As the market environment shifts and changes, investors may also have the opportunity to capitalize on the growth potential of the e-commerce segment. Amplify also expanded its line with the Amplify International Online Retail ETF (NYSEArca: XBUY). XBUY is an index-based ETF that takes on foreign companies or those outside the U.S. that are expected to benefit from the increased adoption of e-commerce around the world.

Additionally, the Global X E-commerce ETF (NasdaqGM: EBIZ) reflects the performance of the Solactive E-commerce Index and looks to invest 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 E-commerce software and services, and/or selling goods and services online.

For more information on the retail sector, visit our retail category.

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