The holiday season is officially upon us and that only means one thing: shopping!
Despite many worrying about a potential economic recession and concerns over tariffs, the holiday shopping numbers are already off to a strong start this year. Between Black Friday and cyber
So how can investors cash in on holiday sales to boost their portfolios through December? The answer is retail ETFs. There are a number of ETFs which offer exposure to the retail industry, but there are really four names to offer full exposure: Amplify Online Retail ETF IBUY, ProShares Online Retail ETF ONLN, VanEck Vectors Retail ETF RTH, SPDR S&P Retail ETF XRT, and Global X E-commerce ETF EBIZ. We put IBUY, ONLN, RTH, XRT
Here’s a quick ticker comparison table from the ETFLogic insights platform:
|Amplify Online Retail ETF||ProShares Online Retail ETF||VanEck Vectors Retail ETF||SPDR S&P Retail ETF||Global X Ecommerce ETF|
|Inception||Apr 20, 2016||Jul 13, 2018||May 02, 2001||Jun 19, 2006||Nov 27, 2018|
All data as of 12.9.2019
One of the biggest things that stands out right away between the ETFs are their geographic exposure. RTH and XRT are US only, so if you want to cash in on all of the international cheer you should go with IBUY, ONLN or EBIZ. But be ready to pay for that international exposure, as IBUY has a 65bps fee while ONLN has a 58bps fee and EBIZ a 50bps fee.
Even though IBUY has a higher fee, it also has a
This year’s online sales have reached all-time highs already this year with Cyber Monday shopping totaling $9.4B, with a $1.5B increase since last year. While RTH and XRT definitely offer exposure to retail companies with a strong online presence, we’re going to continue comparing online focused ETFs IBUY, ONLN, and EBIZ.
Here’s a look at top 10 holdings to help determine which ETFs will give you the best online shopping exposure.
Top 10 holdings:
|IBUY||% Weight||ONLN||% Weight||EBIZ||% Weight|
|Land’s End||3.46%||Alibaba||13.25%||Vipshop Holdings||5.03%|
|Chegg||2.90%||Stitch Fix||4.63%||Alibaba Group||4.75%|
As of 12.9.2019
Just by comparing the top 10 holdings you can definitely see that IBUY has a much more diversified portfolio, while ⅓ of ONLN is just made up of Amazon and Alibaba.
Based on historical performance, EBIZ has outperformed IBUY by 95 bps over the past year and has significantly outperformed
With IBUY and EBIZ left, we’ll take a look at the overlap between the two ETFs. The two ETFs share 22 common constituents with a 34% total overlap. Due to the small amount of total overlap, we would therefore recommend a portfolio of both IBUY and EBIZ to offer the most diversified way to cash in on holiday returns.