Dear Pro Trader Investor,
Today we delve into the world of exchange-traded funds (ETFs) and take advantage of one of today’s most prevalent market trends: online shopping.
According to the fund summary: IBUY seeks investment results that generally correspond (before fees and expenses) to the price and yield of the EQM Online Retail Index.
The fund will invest at least 80% of its total assets in global equity securities that comprise the index, which will primarily include common stocks and/or depositary receipts, such as ADRs and GDRs.
The index seeks to measure the performance of global equity securities of publicly traded companies with significant revenue from the online retail business.
The index methodology is designed to result in a portfolio that has the potential for capital appreciation.
I don’t think I need to go into much detail as to the logic behind this choice. Online retail is taking over commerce. Period.
While huge examples like Amazon and Alibaba provide the macro illustration, hundreds of thousands of smaller vendors with their own online merchant portals provide the backdrop.
Brick and mortar retail sales will continue to suffer — and the domino effect has changed the physical landscape of most modern nations.
Malls are closing; major chains are shutting down; all the while, their online equivalents are seeing greater returns and profit margins than ever.
It’s one of modern history’s most profound transformations, and even more amazing is that this phenomenon is hardly two decades old.
The uncontested heavyweight of the industry, Amazon, was founded just 22 years ago… Today, this $380 billion giant is one of the biggest brands on the planet; its founder, Jeff Bezos, is one of the top five richest people alive; and the company’s various subsidiaries and tendrils reach out to just about every corner of every financial sector.
All in slightly more time than it takes an American to reach drinking age.
IBUY is a conservative, risk-balanced way to enter this market.
Though close to its 52-week highs, I believe that moving forward, we’ll see this sector enjoying near-permanent bullishness.
Indeed, if and when this niche begins to fall off, the news may be bad for us all, because it probably means that commerce as a whole has collapsed.
Until that happens, IBUY will capture the essence of the trend.
Until next time,
John Peterson
Pro Trader Today