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Another Online Retail ETF Arrives From ProShares

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Another Online Retail ETF Arrives From ProShares
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Monday, July 16 was Amazon.com Inc.'s (NASDAQ: AMZN) Prime Day. Perhaps coincidentally, Monday also marked the arrival of another exchange traded fund focusing on e-commerce companies and online retailers.

The ProShares Online Retail ETF (NYSE: ONLN) debuted, adding to the issuer's suite of retail disruption ETFs.

What Happened

The newest ETF from Maryland-based ProShares follows the ProShares Online Retail Index, which is a cap-weighted benchmark.

To be eligible for that index, retailers must meet the following criteria, according to ProShares:

  • Retailers must be classified as an online retailer, an e-commerce retailer, or an internet or direct marketing retailer. 
  • A market capitalization of at least $500 million.
  • A six-month daily average value traded of at least $1 million, and other requirements. 

As of July 2, the index had 21 components.

Why It's Important

The online retail space is booming, a trend that is expected to continue as Amazon and others continue pressuring traditional brick-and-mortar retailers.

“About 10 percent of global retail sales today are made online, leaving tremendous room for growth. Recent data indicates that figure could double by 2030,” according to ProShares.

ONLN holdings include Amazon, Alibaba Group Holding Ltd. (NYSE: BABA), eBay Inc. (NASDAQ: EBAY), Netflix, Inc. (NASDAQ: NFLX), JD.com Inc. (NASDAQ: JD) and Overstock.com Inc. (NASDAQ: OSTK).

ONLN's “strategy pinpoints retailers that principally sell online or through other non-store channels, such as mobile or app purchases, and separates them from those reliant on bricks-and-mortar stores,” ProShares said. 

The new ETF charges 0.58 percent per year, or $58 on a $10,000 investment.

What's Next

ONLN joins the ProShares Long Online/Short Stores ETF (NYSE: CLIX), a long-short strategy, and the ProShares Decline of the Retail Store ETF (NYSE: EMTY), an inverse fund, in the ProShares retail suite.

The ETF will compete directly with the Amplify Online Retail ETF (NASDAQ: IBUY), the first dedicated online retail ETF.

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