ETF Spotlight: EBIZ Regains Momentum After Brief Dip
Global X E-commerce ETF (EBIZ) shares climbed more than a percentage point on Thursday, returning to its months-long perch in positive territory.
The e-commerce-focused fund has soared about 40% over the past year to trade above $24, a result of robust consumer spending that has been driving U.S. post-Covid economic growth and sent stocks in the sector higher. It has risen more than 20% this year.
EBIZ had dipped the previous day along with other major e-commerce companies— First Trust Dow Jones International Internet ETF (FDNI), the ARK Fintech Innovation ETF (ARKF), the Global X Cloud Computing ETF (CLOU), and ProShares Online Retail ETF (ONLN)—after e-commerce software developer Shopify Inc. reported disappointing guidance for its second quarter and the company's share price plunged more than 20%.
FDNI, CLOU and ONLN were back in the green on Thursday. They have benefited from steady gains from online retail and related stocks that are their primary holdings and that have been swept upward by surprisingly robust U.S. consumer spending, particularly online. ONLN is up more than 35% during the past year.
Read More: Online Retail ETFs Plunge After Shopify Earnings
U.S. e-commerce sales in 2023 rose by 7.6%, outpacing the 2.1% gain for retail sales broadly, according to the Census Bureau. Globally, e-commerce sales grew a faster 10% and are expected to grow another 9% this year.
EBIZ's Global Portfolio
EBIZ, which started trading in November 2018 and has about $76 million in assets under management, has targeted the growing importance of e-commerce by tracking online retailers, marketplace platforms, and supporting businesses—such as software providers—that generate at least 50% of their revenues from e-commerce-related operations.
About two-thirds of its portfolio are U.S.-based companies, but the fund has a global footprint. Its second largest holding—more than 4%—is the Singapore-based conglomerate Sea Limited. Tempe, Ariz.-based Carvana Co., the largest holding, also makes up more than 4% of EBIZ's holdings, as do retail giants Amazon.com Inc. and Williams-Sonoma Inc. and Ottawa-based Shopify.
According to Shopify’s Global Ecommerce Sales Growth Report, online sales are expected to “continue rising and take a larger piece of the retail pie.”
“In 2025, global ecommerce sales are forecast to rise to $6.86 trillion, before adding another $550 billion in 2026, to $7.41 trillion. By 2027, it’s estimated that world retail ecommerce sales will hit $7.96 trillion,” according to the report.