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O'Shares OGIG Internet ETF Continues Torrid Ascent, Blister Asset-Gathering Pace

December 23, 2020 1:00 pm
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O'Shares OGIG Internet ETF Continues Torrid Ascent, Blister Asset-Gathering Pace

In a banner year for both growth and internet equities, plenty of related exchange traded funds are standing out and that's certainly true of the O'Shares Global Internet Giants ETF (CBOE: OGIG).

What Happened: OGIG, which is 2 1/2 years old and tracks the O’Shares Global Internet Giants Index, provides many of the advantages investors have come to know and love with older internet ETFs, including exposure to e-commerce and social media names.

The fund “is a rules-based ETF designed to provide investors with the means to invest in some of the largest global companies that derive most of their revenue from the Internet and e-commerce sectors that exhibit quality and growth potential,” according to O'Shares.

Why It's Important: OGIG has some superlatives to speak of, including a year-to-date gain of 113.4% as of Dec. 22. Data confirm investors are taking note as 2020 inflows to the O'Shares ETF total $419.41 million. That represents a significant percentage of the fund's $706.57 million in assets under management.

Any time a stock or ETF doubles in a year, it's impressive, but OGIG's 2020 performance is all the more noteworthy when considering it's delivered nearly double the returns of the Dow Jones Internet Composite Index. Additionally, OGIG's showing this year is more than double that of the Nasdaq-100 Index, the home benchmark for many OGIG components.

Home to more than 60 of the fastest growing internet and e-commerce companies in the world, OGIG offers plenty of avenues for growth.

The revenue growth of OGIG's components is ~3x the Nasdaq 100 and ~4x the S&P Technology Select Sector Index, according to O'Shares data.

What's Next: Another advantage OGIG possesses is that it's not a dedicated domestic ETF. It mixes in the likes of Alibaba (NYSE:BABA) and Tencent (OTC:TCEHY) with Amazon (NASDAQ:AMZN) and Facebook (NASDAQ:FB), among others.

That mix is clearly efficacious at a time when Chinese internet stocks are soaring. OGIG's borderless methodology also allows for the fund to hold a stock like Shopify (NYSE:SHOP), which is excluded from many U.S. internet ETFs.

“The companies in OGIG create a portfolio of digital empowerment and digital transformation of the economy. These companies are powering what I call ‘America 2.0’ and a new, more efficient economy,” said O'Shares Chairman Kevin O'Leary.

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