Liquid Alternatives: Picking eCommerce ETFs Amidst the Retail Apocalypse
America’s retail sales just cratered in April.
American retail sales plunged to a record low in April. It is a reflection of the dire straits that the retail industry is in due to the coronavirus pandemic. US sales fell by 16.4% in April, following up on an 8.3% decline in March. This is the largest two-month plunge on record. The virus scare may be the last straw on the camel’s back, as far as America’s already struggling brick-and-mortar shopping industry is concerned. To put salt to injury, online sales grew 8.4% in April. (CNN)
More than two million retail jobs evaporated in April. Many stores have been forced to declare bankruptcy this month. These include luxury chain Neiman Marcus Group Inc. (NYSE: NMG.A) apparel seller J.Crew Group Inc. (NYSE: JCG) and Stage Stores Inc. (NYSE: SSI).
J.C. Penney (NYSE: JCP), has defaulted on two interest payments and maybe next in line.
According to analysts at UBS, physical stores will continue to close and their count will decrease from 883,000 in 2019 to 782,000 over the coming five years. “Our forecast calls for 2% of stores to close every year into 2025,” says UBS analyst Jay Sole. (ETF TRENDS)
How to capitalize on a secular change in trend
It may be time to make an investment in online shopping, and an eCommerce-themed ETF is a good strategy. Here are a few ETFs for your consideration:
|Name and ticker of ETF||Expense Ratio||Index|
|ProShares Online R etail ETF (NYSEARCA: ONLN)||0.58%||ProShares Online Retail Index|
|Amplify Online R etail ETF (NasdaqGM: IBUY)||0.65%||EQM Online Retail Index|
|Global X E-commerce ETF (NasdaqGM: EBIZ)||0.50%||Solactive E-commerce Index|
|Goldman Sachs Motif New Age Consumer ETF (NYSEARCA: GBUY)||0.50%||Motif New Age Consumer Index|
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