It seems like every year, the holiday shopping season starts earlier. Regardless of when consumers are inundated with related advertising, each holiday season brings with it investment implications.
Fortunately, investors have an array of ways with which to play that theme. And the field has expanded thanks to ETFs, including the ALPS O’Shares Global Internet Giants ETF (OGIG ). As its name implies, OGIG is an internet ETF. So it’s not entirely dedicated to consumer cyclical stocks. Although that sector represents about 18.5% of the fund’s portfolio.
That’s enough to lever the ETF to the holiday shopping. But not so much that if consumers rein in related spending this year, OGIG won’t be damaged. The ETF’s combined weight of more than 75% to technology and communication services stocks provides some buffer against often-volatile consumer sentiment while enhancing the fund’s status as a credible avenue for artificial intelligence investing.
Shopping Deals Could Put OGIG in Focus
Amazon (AMZN) and Shopify (SHOP) are among its top 10 holdings. So OGIG is a valid play on consumer spending. And that play taps into the shopping habits on younger demographics.
“Younger consumers were more responsive to seasonal discounts. Black Friday and Cyber Monday were particularly popular with Gen Z (18%) and Millennials (17%), both of whom were more likely than older adults to shop during major sales events,” noted YouGov. “Few Americans shopped on Christmas Eve or after the holiday (4%), though Gen Z were more likely to delay shopping — 11% said they shopped the week before Christmas.”
Interestingly, in-store shopping remains the dominant form of holiday gift-buying. But that’s largely the result of baby boomers and Gen X enjoying the in-store experience. Younger demographics enjoy online shopping. And that could bode well for the long-term trajectories of OGIG holdings like Amazon and Shopify, among others.
“Online shopping also played a major role, particularly through mobile phones (49%). Millennials were most likely to shop via mobile (60%), followed by Gen Z (50%). Baby Boomers were less likely to use phones (32%) but were the most likely than the other generations to shop online via computer (43%). Tablets were more common among older generations, especially Boomers (14%),” added YouGov.
Figuring Into the OGIG Equation
The extent to which Amazon and other online retailers offer sales this holiday season could figure into the OGIG near-term equation because some younger shoppers are price-conscious.
“Gen Z has the highest concentration of low spenders, with 37% having spent under $100. Nearly a fifth of Millennials (19%) also say they spent less than $100 last year, with 17% spending in the mid-range between $100 to $199 and another 17% saying they spent $200 to $299,” concluded YouGov.
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