investing

Amplify Online Retail: A Bet on How We Will Shop

This ETF invests in fast-growing internet retailers around the world.

The pandemic brought business at many stores to a near-screeching halt. But some online retailers thrived during the quarantine—including Overstock.com (symbol, OSTK), where April sales were up 120% compared with April 2019.

That helps explain why the Amplify Online Retail (IBUY) exchange-traded fund, which owns shares of Overstock, posted a 25.7% return over the past 12 months. That beat 99% of its peers (funds that focus on consumer-spending stocks). Over the same stretch, the broad market eked out a 2.5% gain. Two of the ETF’s best performers, Stamps.com (STMP) and Shopify (SHOP), each notched triple-digit percentage gains over the past 12 months.

Kiplinger's Personal Finance

Getty Images

The fund tracks an index of U.S. and foreign companies that generate at least 70% of annual revenues or $100 billion in annual sales from internet-based retail, travel or services. The 47 stocks that match the ETF’s parameters are weighted equally, so the shares of Latin American online auction and e-payment firm Mercado Libre (MELI) or Peloton Interactive (PTON), for instance, get as much play as shares of Chinese e-commerce giant Alibaba Group Holding (BABA) or Amazon.com (AMZN), the biggest online retailer in the world. The fund is rebalanced twice a year.

In the U.S., online sales account for 11% of total retail sales; in China, roughly 35%; and in Europe, nearly 10%, on average. “It’s still early in the game” for online retail, says Christian Magoon, chief executive of Amplify. Retail e-commerce sales worldwide are expected to increase to $6.5 trillion in 2022 from $3.5 trillion in 2019, according to Statista.

Most Popular

The Perfect Storm for Retirees
retirement planning

The Perfect Storm for Retirees

Today’s retirees could face a perfect storm because they are living longer and spending more time in retirement, while at the same time losing access …
April 18, 2021
The Wrong Way to Achieve Wealth
personal finance

The Wrong Way to Achieve Wealth

For some down-to-earth, basic advice on money and life, I have a book to recommend: “Your Total Wealth: The Heart and Soul of Financial Literacy.”
April 17, 2021
Child Tax Credit 2021: Who Gets $3,600? Will I Get Monthly Payments? And Other FAQs
Coronavirus and Your Money

Child Tax Credit 2021: Who Gets $3,600? Will I Get Monthly Payments? And Other FAQs

People have lots of questions about the new $3,000 or $3,600 child tax credit and the advance payments that the IRS will send to most families in 2021…
April 14, 2021

Recommended

Investing in Gold: 10 Facts You Need to Know
gold

Investing in Gold: 10 Facts You Need to Know

Gold tends to do well in times of trouble.
April 19, 2021
ETFs vs. Mutual Funds: Why Investors Who Hate Fees Should Love ETFs
ETFs

ETFs vs. Mutual Funds: Why Investors Who Hate Fees Should Love ETFs

Exchange-traded funds offer a huge cost savings to consumers over mutual funds. Here’s why, and a couple of quirks about ETFs to watch out for as well…
April 10, 2021
9 E-Commerce ETFs for the Future of Digital Spending
ETFs

9 E-Commerce ETFs for the Future of Digital Spending

'Return to normal' or not, digital commerce should continue to be a rewarding investment trend for many years to come. These e-commerce ETFs help you …
April 6, 2021
The Space (ETF) Race: UFO, ROKT and ARKX
ETFs

The Space (ETF) Race: UFO, ROKT and ARKX

The blossoming space industry already has prompted a handful of space-themed ETFs. But UFO, ROKT and ARKX are three distinctly different products.
March 30, 2021