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Celebrate Holiday Shopping With A New E-Commerce ETF

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Celebrate Holiday Shopping With A New E-Commerce ETF
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Just a few days after Cyber Monday and less than a week after Black Friday, new exchange traded fund focusing on the booming e-commerce theme debuted.

Global X, one of the largest purveyors of targeted and thematic ETFs, introduced the Global X E-commerce ETF (NASDAQ: EBIZ) on Thursday.

What Happened

EBIZ follows the Solactive E-commerce Index. The new ETF “seeks to invest in companies positioned to benefit from the increased adoption of E-commerce as a distribution model, including companies whose principal business is in operating E-commerce platforms, providing E-commerce software and services, and/or selling goods and services online,” according to New York-based Global X.

The new holds 37 stocks and is a global fund with exposure to nine countries, but the U.S. and China combine for nearly three-quarters of EBIZ's geographic exposure.

Why It's Important

EBIZ faces competition from several established players in the e-commerce ETF niche, but data suggest there could be room for multiple successful funds in this arena.

“According to the US Department of Commerce, e-commerce as a percentage of total retail sales reached a new all-time high in Q3 2018, yet that percentage was still just 9.8%, leaving over 90% of the retail market still susceptible to online disruption,” said Global X in a research note. “According to the US Department of Commerce, e-commerce as a percentage of total retail sales reached a new all-time high in Q3 2018, yet that percentage was still just 9.8%, leaving over 90% of the retail market still susceptible to online disruption.”

None of the holdings in EBIZ currently exceed weights of 4.92 percent. The rookie ETF's top 10 holdings include Etsy Inc. (NASDAQ: ETSY), Amazon.com Inc. (NASDAQ: AMZN) and Shopify Inc. (NASDAQ: SHOP).

What's Next

The ex-U.S. exposure offered by EBIZ is another point to consider.

“Outside of the United States there is an even larger opportunity for e-commerce, with approximately $16 trillion of traditional retail sales still untouched by e-commerce,” according to Global X.

The new ETF charges 0.68 percent per year, or $68 on a $10,000 investment.

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