After almost round-the-year coronavirus fear, Holiday Season is peeking into the calendars. It is time for consumers to stack up their shopping carts. Over the last few years, online sales have gained precedence. The coronavirus outbreak has raised the appeal of the space even more as it has less to do with human contact. So, one can imagine the likelihood of exponential gains in eCommerce stocks and ETFs this year.
Big Four accounting firm Deloitte expects a rise in holiday retail sales between 1% to 1.5%. On the other hand, market research firm Forrester sees retail sales declining 2.5% for the full year, as quoted on Forbes. The Forbes article highlighted that Forrester sees online retail jumping 18.5% this year and attaining 20.2% overall penetration in North America.
Deloitte predicts e-commerce holiday retail sales to grow between 25% and 35% from November through January, reaching $182 billion to $196 billion in total.“For the last four years, e-commerce growth has averaged between 13% to 17% increase, and last year it was up 14.7%. This year it will go ballistic, somewhere around 25% and it may go higher,” per Deloitte’s vice chairman and U.S. leader retail and distribution, as quoted on the Forbes article.
Shopping will be done early too as retailers would like to avert overcrowding in stores as well as the last-minute spike in online purchases that results in shipping problems. The National Retail Federation announced the debut of its new ad campaign, “Shop safe, shop early,” as quoted on CNBC.
Companies including Walmart and Best Buy will shoot deals next month. Amazon’s Prime Day deals will begin at midnight on Oct 13 and continue through Oct 14. Target also will host a deal event on those two days. So, it is wise to tap stocks and ETFs as early as now since the shopping frenzy is going begin soon. Below we highlight a few ETFs that could see solid gains in the fourth quarter.
ProShares Online Retail ETF ONLN – Up 3% on Oct 7
The underlying ProShares Online Retail Index is a specialized retail index that tracks retailers that principally sell online or through other non-store channels. Amazon is the top holing in the fund (read: 4 ETFs To Play The Hot Events Of Q4).
Amplify Online Retail ETF IBUY – Up 3.1% on Oct 7
The underlying EQM Online Retail Index utilizes a rules-based methodology to select a globally diverse group of companies with 70% or more of revenue from online and virtual sales.
Global X E-commerce ETF EBIZ – Up 2.3% on Oct 7
The underlying Solactive E-commerce Index provides exposure to companies that are positioned to benefit from the increased adoption of e-commerce as a distribution model, including but not limited to companies whose principal business is in operating e-commerce platforms, providing e-commerce software and services, and selling goods and services online. The fund has 51.8% focus on the United States followed by 25.2% focus on China.
VanEck Vectors Retail ETF (RTH) – Up 1.9% on Oct 7
The underlying MVIS US Listed Retail 25 Index tracks the overall performance of companies involved in retail distribution, wholesalers, on-line, direct mail and TV retailers, multi-line retailers, specialty retailers and food and other staples retailers.
Though the fund doesn’t have a full focus on online sales, it puts 19.3% weight in Amazon, 11% weight in Home Depot, 9.1% weight in Wal Mart, 4.8% focus on Target and 4.5% focus on JD.Com. All these companies have a considerable online exposure.
ProShares Long Online/Short Stores ETF (CLIX) – Up 1.8% Oct 7
The fund provides 100% long exposure to online retailers and 50% short exposure to retailers that rely mainly on in-store revenues.
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VanEck Vectors Retail ETF (RTH): ETF Research Reports
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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.