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Cyber Monday Gives E-Commerce ETF A Modest Boost

November 27, 2018 8:50 am
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Along with other Internet-related exchange traded funds, the Amplify Online Retail ETF (NASDAQ:IBUY) is enduring a rough fourth quarter.

IBUY, the original e-commerce ETF, is saddled with a fourth-quarter loss of 18.35 percent, but bullish Cyber Monday data boosted the fund to start this week.

What Happened

On above average volume, IBUY gained 1.55 percent Monday, extending its winning streak to three days in the process. By some estimates, Cyber Monday sales will generate close to $8 billion.

“Target and Amazon.com were pulling out all the stops, offering free delivery with no minimum order requirement and bombarding shoppers with promotional emails. Companies had logged $531 million in sales as of 10 a.m. ET, Adobe Analytics found,” according to Reuters.

Why It's Important

IBUY tracks the EQM Online Retail Index, which requires member firms to generate 70% of their sales from online venues. Traditional brick-and-mortar retailers such as Target Corp. (NYSE:TGT) and Macy's Inc. (NYSE:M) are not among IBUY's 42 holdings.

None of IBUY's holdings command weights of more than 3.7 percent, so the ETF isn't dominated by Amazon.com Inc. (NASDAQ:AMZN) as are so many standard Internet ETFs. Although Amazon is the largest U.S.-based e-commerce company, it's not even a top 10 holding in IBUY. Ebay Inc. (NASDAQ:EBAY), the second-largest online retailer, is IBUY's sixth-largest holding at a weight of 3.38 percent, according to issuer data.

“In another estimate, Mastercard SpendingPulse forecast a 25 percent jump in e-commerce sales to at least $3 billion, based on sales via the Mastercard payments network and estimates for other payment forms such as cash and check,” Reuters reports.

What's Next

IBUY debuted in April 2016, so this isn't the ETF's first dance with the holiday shopping season. In 2016, IBUY fell 2.20 percent in the fourth quarter. Last year, the fund posted a fourth-quarter gain of 10.80 percent. IBUY is up 71 percent since inception.

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