ETFs to Tap on Soaring E-Commerce Sales Amid Coronavirus

The COVID-19 pandemic has ramped up the digital shift, which is likely to last longer than expected even after the economy reopens. E-commerce companies have been the most sought after on Wall Street as lockdowns have resulted in the forced closure of malls and retail stores.

E-commerce sales climbed at the highest pace since late February, jumping 25% during the week ending Apr 20, according to Signifyd’s E-commerce Pulse data. The jump surpassed the previous record of 17% for the week ending Apr 6. Overall, there is an increase of 85% in ecommerce spending since late February. According to the market research firm Rakuten Intelligence, e-commerce spending in the United States is up more than 30% from the beginning of March through mid-April compared with the same period last year (read: Hot ETFs to Tap Consumers' Digital Shift Amid Coronavirus).

Although online grocery sales were the least investor favorite, it has emerged as the hottest category during the epidemic. According to Nielsen and Rakuten Intelligence, U.S. online sales of consumer-packaged goods (CPG) — the kind of items typically sold in grocery stores — grew 56% for the week ending Apr 18. Food topped the list, with sales soaring 69.5% year over year, followed by a 57.5% surge in online sales of household care items and growth in the health and beauty care (47.7%), baby care (27.2%) and pet care (22.3%) categories.

Per Namogoo, online supermarket visits were up 162% from the year-ago levels in March and up 146% from February 2020.

Bloomberg stated that Amazon AMZN is the top-most, high-profile winner of the current environment. Shares of AMZN jumped more than 40% from a low hit last month and has nearly overtaken Apple AAPL in market capitalization. Goldman believes that the pandemic would “steepen the curve of Amazon’s long-term growth rate, drive incremental profitability, and further deepen the competitive moat around all of its businesses.”

Other e-commerce stocks saw bigger share-price rallies. Shopify SHOP is up more than 85% from a low hit earlier this month, becoming one of the most valuable companies in Canada, while Wayfair W has more than quintupled off a March low, having surged more than 400% over the period. Shares of eBay EBAY are also up nearly 50% from a low hit last month.

Below we have highlighted some ETFs to tap soaring e-commerce sales:

Amplify Online Retail ETF IBUY

This ETF offers global exposure to companies that derive 70% or more revenues from online and virtual retail by tracking the EQM Online Retail Index. The fund comprises 47 stocks and has attracted $257.1 million in its asset base. It charges 65 bps in fees per year and trades in average daily volume of 44,000 shares. The product has gained 27% in a month.

ProShares Online Retail ETF ONLN

This ETF focuses on global retailers that derive significant revenues from online sales. It tracks the ProShares Online Retail Index, holding 24 stocks in its basket. The product has amassed $76.7 million in its asset base and trades in paltry volume of around 26,000 shares a day on average. It charges 58 bps in annual fees from investors and has risen 26.9% in a month.

Global X E-commerce ETF EBIZ

This fund invests in companies positioned to benefit from increased adoption of e-commerce as a distribution model, including companies whose principal business is in operating e-commerce platforms, providing related software and services, and/or selling goods and services online. It has accumulated $10 million in its asset base and charges 50 bps in annual fees. The ETF sees average daily volume of 7,000 shares and is up 22.8% in a month (read: 5 Best Sector ETFs Halfway Through April).

O’Shares Global Internet Giants ETF OGIG

The fund invests in some of the largest global companies that derive most of their revenues from the Internet and e-commerce sectors that exhibit quality and growth potential by tracking the O’Shares Global Internet Giants Index. It holds a basket of 70 stocks and charges 48 bps in annual fees. OGIG has been able to attract $73.3 million in its asset base and trades in average daily volume of 49,000 shares. It has gained 18.2% in a month.

SPDR S&P Internet ETF XWEB

This product follows the S&P Internet Select Industry Index, holding 42 stocks in its basket. It charges 35 bps in annual fees and trades in a volume of 3,000 shares. With AUM of $14.2 million, the fund has gained 23.5% and carries a Zacks ETF Rank #2 (Buy).

Invesco NASDAQ Internet ETF PNQI

This fund offers exposure to the largest and most-liquid companies that are engaged in Internet-related businesses by tracking the Nasdaq Internet Index. Holding 81 stocks in its basket, it has AUM of $546.1 million and trades in lower volume of about 29,000 shares a day. It charges 62 bps in fees per year and carries a Zacks ETF Rank #2. PNQI has added 17.3% in a month (read: Stay-at-Home Boosts Netflix Q1 Subscribers: ETFs to Buy).

First Trust Dow Jones Internet Index Fund FDN

This fund follows the Dow Jones Internet Composite Index, giving investors exposure to the broad Internet industry. It holds about 42 stocks in its basket. FDN is the most popular and liquid ETFs in the broad technology space with AUM of $8.1 billion and average daily volume of around 470,000 shares. It charges 52 bps in fees per year and has a Zacks ETF Rank #2. The ETF is up 17.6% in a month.

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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
 
Apple Inc. (AAPL) : Free Stock Analysis Report
 
eBay Inc. (EBAY) : Free Stock Analysis Report
 
Wayfair Inc. (W) : Free Stock Analysis Report
 
Invesco NASDAQ Internet ETF (PNQI): ETF Research Reports
 
Shopify Inc. (SHOP) : Free Stock Analysis Report
 
SPDR S&P Internet ETF (XWEB): ETF Research Reports
 
Amplify Online Retail ETF (IBUY): ETF Research Reports
 
First Trust Dow Jones Internet ETF (FDN): ETF Research Reports
 
ProShares Online Retail ETF (ONLN): ETF Research Reports
 
Global X E-commerce ETF (EBIZ): ETF Research Reports
 
OShares Global Internet Giants ETF (OGIG): ETF Research Reports
 
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