Investing in ETFs. Which ones to choose?

TheCovid-19 health emergency has definitely hurt the economies of various countries. We see sectors such as industrial and tourism, to name a few, in severe crisis. Yet someone gained from it. And quite a lot, too. You all know who I am talking about. Everything related to online commerce, with Amazon being the front-runner. Let’s look at two numbers:

Investing in ETFs
Retail e-commerce sales in the United States from 2017 to 2024(in million U.S. dollars)

The chart shows us the forecast of online sales to retailers in the United States through 2024.

So does Amazon remain a good investment? It cannot be said with certainty. Certainly Amazon resembles a bottom. It is not simply the site that ships you iphone covers or cat kibble in a day, it is far more than that. A cloud system, a video and music distribution system(Amazon Prime), streaming platforms(Twich), Audible, and you name it. So a real colossus. But it is not the only one. Alibaba we can call it the “Chinese Amazon” which unlike Amazon also has a B2B distribution network in addition to the classic B2C. The stock market performance of BABA we see clearly, it is worth significantly less than Amazon.

Investing in ETFs?

What could be a solution for investing in online commerce? An ETF on e-commerce. In this way I would go and eliminate the specific risk on the company alone.

We mention 2 of these ETFs:

-L&GEcommerce Logistics UCITS ETF

-ProSharesOnline Retail ETF

The former includes various industry leaders, including Zalando, JD.com, but also the couriers used to transport such goods such as FedEx.

The second is more weighted on Amazon and Alibaba. Both go for 36 percent of the ETF.

ProShare’s own global investment strategist points out to us how the impact of the virus has weighed on retail sales. While total retail sales decreased by 3.9 percent in the second quarter of 2020, sales from e-commerce increased by 31.8 percent. But what is the important point to keep in mind? That should everything return to normal quickly, e-commerce would not disappear; on the contrary. By now it has become habit for many and especially for the younger generation. So a strong rebound in consumption would mean a strong increase in online sales as well.

Who will be important new e-commerce customers? Probably schools. Stationery, books, and everything that gravitates to it. And the school term is beginning.

Everyone, as always, is invited to do their own analysis of the various assets and sectors. If you would like to discuss this with us, I invite you to the Telegram group

I also invite you to listen to our latest Podcast!


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