e-Commerce ETF comes of age

Last January Canadian MoneySaver published my article on investing in the e-commerce secular trend. That article has since been posted here for free on money4retirement.ca as you may know.

In that article I mentioned in the footnotes a newer ETF called Amplify Online Retail ETF (IBUY) that trades on the NASDAQ. The fund was started in April 2016 and holds online retail stocks. At the time of publication of my article in CMS, I considered the fund too small for average investors to consider (it had a market cap of only $4.23 million and 150,000 shares were trading).

According to YCharts, the ETF today has a market value of $120.25M US and its 30-day average trading volume is just over 41,000 shares. So it is still not overly liquid, but is starting to get a bit more interesting given its growing market value.

The fund is interesting in a few ways:

  • while it is about 80% American focused, it also has about 8% and 10% invested in European and Asian holdings respectively
  • its composition is about 70% consumer discretionary (as expected), but also has exposure to technology (~21%), consumer defensive (~5%) and financial services (~4%)
  • the vast majority of the fund’s style is mid to small cap (~75%) and either small, mid or large cap growth (~72%)
  • it has 41 holdings in total with the top holding consisting of about ~7% of the fund’s value
  • IBUY pays no dividend and has a weighted average P/E of about 30, so is not cheap
  • as of October 31, 2017, its top ten holdings include:
Symbol Name % Weight Price % Chg
OSTK Overstock.com Inc 7.28% 44.55 +1.95%
STMP Stamps.com Inc 5.51% 171.25 -22.60%
CVNA Carvana Co A 4.41% 14.06 +0.43%
ETSY Etsy Inc 4.31% 16.59 +0.55%
PETS PetMed Express Inc 4.07% 36.56 -2.12%
PYPL PayPal Holdings Inc 4.01% 73.39 +1.58%
W Wayfair Inc Class A 3.92% 67.50 +7.42%
GRUB GrubHub Inc 3.71% 62.19 +2.24%
IAC IAC/InterActiveCorp 3.65% 129.15 -0.27%
NFLX Netflix Inc 3.45% 200.01 +0.35%

This is by no means an endorsement of the fund, but it is worth noting how quickly it is growing, and it may be on the cusp of becoming a viable pure-play holding in the e-commerce space for average, if high risk, investors.

 

Disclaimer: I/we do not hold shares in IBUY nor do we intend to purchase them in the foreseeable future.

Author: Michael

staff@money4retirement.ca

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