Bet on the E-Commerce Boom With This ETF
E-commerce is a pretty sound long-term investment. Although online marketplaces like eBay (NASDAQ:EBAY) and Amazon (NASDAQ:AMZN) are by no means new, there's still plenty of growth opportunities available in e-commerce as greater smartphone use across the world makes it more convenient to buy online.
Despite being worth a hefty $9 trillion in 2019, according to Grand View Research, the industry is going to continue growing at a compounded annual growth rate of 14.7% until 2027.
Although the easy option may be to just invest in Amazon, the company's mammoth $1.7 trillion valuation will make it challenging to earn a strong return off of the stock. A better option might be to invest in the Global X E-commerce ETF (NASDAQ:EBIZ) which will give investors broader exposure to the industry.
The fund holds shares of "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."
Read:
Innovations in Plant-Based Protein Products Supplying the Food Industry’s Strongest Trends
Dogecoin Set to Deliver Long Term, as Major Businesses Make Moves to Accept it as Payment
Crypto Miners Making Gains on Rising Waves for Bitcoin, Ethereum, Dogecoin and More
Hedge-Like Properties of Bitcoin and Other Digital Currencies are Driving Crypto Mining Stocks Up
Shortages of Covid-19 Tests Creates Accelerated Demand for New Diagnostic Technology
While Amazon is included in the fund's holdings, it only makes up a little over 4% of the net assets and there are 11 companies ahead of it, including Etsy (NASDAQ:ETSY), which accounts for 5.55% of the fund's net assets. Ebay is the fourth largest holding.
There are 40 stocks in the fund in total, with the vast majority (70%) being in the consumer discretionary sector. Communication services (22.5%) make up the next largest category of holdings.
The fund has been around since 2018 and during that time it has outperformed the S&P 500, rising more than 108% while the index has risen by 82%.