Online Retail ETF undergoes rebalance ahead of expected surge in online retail sales this winter.

09 December 2022

  • The Global Online Retail UCITS ETF (IBUY) has undergone a rebalance, before the holiday season.
  • Included in the additions are MercadoLibre, Global E-Online, and Uber.
  • Jane Edmondson, fund manager for the Global Online Retail UCITS ETF, is expecting a surge in online retail sales this winter.

 

December 2022, London

The index for the Global Online Retail UCITS ETF has undergone its latest rebalance, following predictions of a busy holiday season for online shoppers.

Added to the index was MercadoLibre, the Latin-American based online marketplace and payment platform that continues to beat revenue expectations. Brazil, in particular, was cited as a nation in which MercadoLibre is growing faster than expected particularly in the areas of apparel and consumer electronics sales. Latin America is used to dealing with inflation and consumers are well poised to spend this holiday season, further spurred by FIFA World Cup.

Global E-Online, an Israel-based online infrastructure platform, has also been incorporated into the index’s holdings. Post the pandemic, the Shopify-backed online sales channel has ramped-up across retail even among brick-and-mortar, traditional players, creating a huge opportunity to expand cross-border business. Global E-Online is growing its platform and customer base.

Also added was US-based rideshare platform Uber, which is benefiting from increased demand for travel and events. It has also built out other verticals in restaurant and grocery delivery (UberEats) with its omnichannel approach to mobility, helping them scale and gain share over other competitors such as Lyft.

Similar to Amazon, Uber is leveraging customer stickiness to attract new users and get existing customers to spend more money on the platform. Another example is the recently added advertising division that oversees in-app ads during rides. All these things are helping Uber drive revenue growth and gain share.

As the holiday season approaches, the Global Online Retail UCITS ETF is expected to capture the expected surge in online sales, despite the ongoing inflationary environment.

 

Jane Edmondson, fund manager for the Global Online Retail UCITS ETF (IBUY), comments:

“We believe investors are underestimating the prospects for online retailers this holiday season, which may provide significant upside opportunity. As inflation causes consumers to be pickier about where and how they spend, shoppers will once again embrace the better selection, price comparisons, and convenience of online shopping this holiday season. Higher fuel costs will also discourage aimless driving around and lead to seeking advice online.

“While the in-store experience may be fraught with long lines and limited inventory, the online shopping experience has been enhanced by digital capabilities such as personalization, virtual try-on options, Buy Online, Pickup In-Store (BOPIS), social commerce and livestreaming, and Buy Now Pay Later (BNPL) flexible payment options for cash-strapped consumers. And for online retailers, technology can help drive sales, proactively targeting consumers using artificial intelligence (AI). Mobile ads, in-app rewards, and gaming apps are key ways for retailers and brands to connect with shoppers.”

 

Please remember that the value of your investment may go down as well as up and past performance is no indication of future performance. When you trade ETFs, your capital is at risk.

 

Sign Up to Insights

Tell us how we can help