Amplify Online Retail: A Bet on How We Will Shop

The pandemic brought business at many stores to a near-screeching halt. But some online retailers thrived during the quarantine—including Overstock.com (symbol, OSTK), where April sales were up 120% compared with April 2019.

That helps explain why the Amplify Online Retail (IBUY) exchange-traded fund, which owns shares of Overstock, posted a 25.7% return over the past 12 months. That beat 99% of its peers (funds that focus on consumer-spending stocks). Over the same stretch, the broad market eked out a 2.5% gain. Two of the ETF’s best performers, Stamps.com (STMP) and Shopify (SHOP), each notched triple-digit percentage gains over the past 12 months.

The fund tracks an index of U.S. and foreign companies that generate at least 70% of annual revenues or $100 billion in annual sales from internet-based retail, travel or services. The 47 stocks that match the ETF’s parameters are weighted equally, so the shares of Latin American online auction and e-payment firm Mercado Libre (MELI) or Peloton Interactive (PTON), for instance, get as much play as shares of Chinese e-commerce giant Alibaba Group Holding (BABA) or Amazon.com (AMZN), the biggest online retailer in the world. The fund is rebalanced twice a year.

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In the U.S., online sales account for 11% of total retail sales; in China, roughly 35%; and in Europe, nearly 10%, on average. “It’s still early in the game” for online retail, says Christian Magoon, chief executive of Amplify. Retail e-commerce sales worldwide are expected to increase to $6.5 trillion in 2022 from $3.5 trillion in 2019, according to Statista.