Celebrate Holiday Shopping With A New E-Commerce ETF

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 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. ETSY, Amazon.com Inc. AMZN and Shopify Inc. 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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