New exchange traded fund provider Amplify ETFs has introduced its first exchange-traded fund to the market following the firm’s launch last year by ETF industry veteran Christian Magoon. The Amplify Online Retail ETF (Nasdaq: IBUY) invests in globally-listed companies that generate at least 70% of their revenue from online and virtual retail sales. The ETF tracks the performance of the EQM Online Retail Index.
The Amplify Online Retail ETF (Nasdaq: IBUY) provides exposure to leading global online retailers while equal-weighting its constituents.
According to a research report released in April 2015 by AT Kearney, a London-based business consultant, global online sales were expected to grow by 117% by 2018. In separate research released by eMarketer in July 2014, the amount of online buyers worldwide was expected to grow by 50% by 2018.
“The mall is not dead, it has just moved online,” said Jane Edmondson, CEO of EQM Indexes. “Online retailers are well positioned to meet the needs of consumers around the world.”
Christian Magoon, Founder and CEO of Amplify ETFs, added: “The growth rate of online retail sales versus brick and mortar sales has been significant. IBUY offers a compelling opportunity for investors to capitalize on this trend. The portfolio holdings of IBUY may increase overall portfolio diversification for investors with traditional brick and mortar retail and consumer discretionary exposure.”
The online retail space is well placed to harness recent innovations to boost sales and growth. These include electronic payments, rapid delivery by drone technology, and virtual reality (virtual showrooms and 3D display of merchandise) which will continue to enhance the online shopping experience and drive expansion.
“We believe that as technology continues to reshape how consumers spend money, the online retail market segment will continue to blossom,” said John Phillips, Director of Operations at Amplify ETFs. “This ETF seeks to provide a direct opportunity to invest in this area of growth.”
The index uses a cap of 25% on non-US stocks and weights all constituents according to a modified equal weighting methodology.
As of 31 March 2016, the fund has 44 holdings with significant country exposure to the United States (75%), China (8%), Japan (4%) and the United Kingdom (3%). The online retail market segments weightings are traditional retail (60%), marketplace (26%) and travel (14%).
The fund has a total expense ratio of 0.65%.