Online Sales Stay Strong in US Holiday Season: 4 ETF Picks


The coronavirus pandemic continues to provide a push to the e-commerce industry as shoppers are still preferring the online shopping mode. This holiday season was no different when Americans filled in their shopping carts with a click from the comforts of their homes.

Going by a Mastercard (NYSE:) SpendingPulse report, holiday retail sales in the United States after excluding automotive from Nov 1 through Dec 24 climbed 8.5% year over year. Online sales rose 11% and contributed to 20.9% of overall retail sales, up from 20.6% in 2020 and 14.6% in 2019, on par with the digitization trend.

The pandemic has remained a blessing in disguise for the e-commerce industry to date as people continue to practice social distancing and shop online for all essentials, especially food items.

Considering high demand for online shopping, retailers are moving toward a hybrid/omnichannel model so that customers can enjoy quick delivery or collect items ordered online (BOPIS, curbside pickup) at their convenience and through apps that arrange personal shoppers.

In this regard, Oliver Chen, a retail analyst for Cowen commented that several retailers, including Walmart (NYSE:), Costco (NASDAQ:) and Target (NYSE:), are well-positioned because they cut across merchandise categories along with online business options, like curbside pickup and home delivery, per a CNBC article.

According to Mastercard SpendingPulse, U.S. retail sales — excluding automotive — for the 75 days that run from Oct 11 to Dec 24 were up 8.6% from a year-earlier level. The report also demonstrated a year-over-year increase in sales for several categories featuring 47.3% for apparel, 32% for jewelry and 16.2% for electronics. Department stores witnessed sales growth of 21.2%, per Mastercard SpendingPulse report.

Commenting on the data, Steve Sadove, senior advisor for Mastercard and former CEO and Chairman of Saks Incorporated, reportedly said that “Shoppers were eager to secure their gifts ahead of the retail rush, with conversations surrounding supply chain and labor supply issues sending consumers online and to stores in droves. Consumers splurged throughout the season, with apparel and department stores experiencing strong growth as shoppers sought to put their best dressed foot forward.”

Furthermore, U.S. consumer confidence strengthened in December. The Conference Board’s measure of consumer confidence index stands at 115.8 in December, comparing favorably with an upwardly revised reading of 111.9 in November. December’s reading surpassed the consensus estimate for the metric, coming in at 111, per a Bloomberg poll. The latest consumer sentiment readings for December also look encouraging as the metric rose despite the rising Omicron-variant cases. The University of Michigan’s final consumer sentiment rose to 70.6 during December, up from the preliminary estimate of 70.4 and 67.4 in November.

Online Retail ETFs in Focus

Against this backdrop, let’s look at some ETFs that are well-poised to benefit from the new shopping trend:

Amplify Online Retail ETF IBUY

Amplify Online Retail ETF provides a cost-efficient way for investors to own a basket of companies with significant revenues from online or virtual retail sales. With AUM of $628.1 million, IBUY has an expense ratio of 65 basis points (bps) (read: What’s Making Retail ETFs Great Bets Now? Let’s Explore).

ProShares Long Online/Short Stores ETF CLIX

ProShares Long Online/Short Stores ETF seeks investment results, before fees and expenses, that correspond to the performance of the ProShares Long Online/Short Stores Index. With AUM of $45.9 million, CLIX has an expense ratio of 65 bps (read: Online Retail ETFs to Gain From Holiday Shopping Craze).

ProShares Online Retail ETF ONLN

ProShares Online Retail ETF seeks investment results, before fees and expenses, that track the performance of the ProShares Online Retail Index. With AUM of $628.8 million, ONLN has an expense ratio of 58 bps (read: Play 5 High-Beta ETF Areas for January & Be a Bottom Fisher).

Global X E-commerce ETF EBIZ

Global X E-commerce ETF seeks investment in companies positioned to benefit from the increased adoption of e-commerce as a distribution model, including those with principal business operating e-commerce platforms, providing e-commerce software and services, and/or selling goods and services online. With AUM of $170.8 million, EBIZ has an expense ratio of 50 bps (read: Online/e-Commerce Inflation at Record High: ETFs to Win).

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Amplify Online Retail ETF (IBUY): ETF Research Reports

ProShares Long OnlineShort Stores ETF (CLIX): ETF Research Reports

ProShares Online Retail ETF (ONLN): ETF Research Reports

Global X Ecommerce ETF (EBIZ): ETF Research Reports

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