VIDEO: ETF of the Week: Amplify Online Retail ETF (IBUY)

Chuck Jaffe: One fund, on point for today. The expert to talk about it. This is the ETF of the Week. We get the latest take from Todd Rosenbluth. He’s the head of research at VettaFi. And at VettaFi.com, you’ll find all the tools and research you need to be a savvy, smart, investor in ETFs. Check out the new, newsworthy, trending, unique, and intriguing ETFs that we discuss here.

Todd Rosenbluth, it’s great to chat with you again.

Todd Rosenbluth: Happy to be back, Chuck. 

Chuck Jaffe: Your ETF of the Week is …

Todd Rosenbluth: The Amplify Online Retail ETF. Ticker IBUY.

Chuck Jaffe: IBUY. The Amplify Online Retail ETF is an interesting pick at a time when some people are saying the consumer may be starting to lose some steam. So why this ETF now, Todd?

Todd Rosenbluth: I think online spending is not close to slowing down. We might see spending slow down on concerns about the economy. But online retail spending has been increasing. We saw that in the latest data that’s come out. We’ve seen that with Amazon Prime over the summer being quite strong. In New York, we’re heading into back-to-school season.

I know that’s happening in other places around the country. Online shopping continues, and we think many people are focused on using their online options to be able to set themselves up for the end of the year. This is a great, well-diversified ETF to get exposure.

Chuck Jaffe: That said, it’s an interesting pick. Because some of our audience members are going to say, OK, I’ll take the pick from Todd. I’ll see what others think about it. Well, Morningstar doesn’t think much about this. This fund only gets one star. And by the way, if you’re trend following — and I know that’s not what you do — but it’s what some folks do.

Of course, your predecessor here on ETF of the Week, Tom Lydon, was a noted trend follower. This is also a fund that is below its 200-day moving average.

So let’s take them one at a time. The star rating and the 200-day moving average thing.

Todd Rosenbluth: Well, I think you can take them together! Certainly, the Morningstar rating is a backward look over the last three years. This fund has underperformed some broader consumer discretionary investments. Why? In part, because it’s not dominated by Amazon. So, there’s other online retail ETFs, where Amazon is by far the largest weighting. In the broader consumer discretionary sector, whether it’s a State Street product or Vanguard product, it’s dominated by Amazon. Amazon’s a great company. I certainly know that it’s getting attention. I see the packages that come to my house.

But there are other packages that come to my house. There are other strong online retail companies — many of them much smaller in size than Amazon. And you want to have diversification within your portfolio. So, that’s the vast performance. The trend — is this a buying opportunity? Perhaps because it’s pulled back, and the sentiment is a little weaker. Perhaps. And that’s why folks may want to take a closer look at IBUY.

Chuck Jaffe: Folks have concern about the impact of a potential recession; some folks have said we’re actually already in a recession, if you don’t use the classic measures. But you say, let’s look at consumers, right? And they’ve said the bottom 20% of consumers think we’ve already been in a recession.

Well, I know that according to a recent study from Bankrate.com, just over one-third of U.S. consumers say they’re living paycheck to paycheck. Now, admittedly, that doesn’t mean they’re not shopping. In fact, they could be living paycheck to paycheck because they have a little Amazon problem or a problem with a lot of online retailers. But there is a concern among economists that the consumer is getting tired. And given that this fund is below its 200-day moving average, would you at all wait to get some confirming signal?

Or, it’s the consumer? They are resilient. You buy in and you know they will bounce back because they spend their way out of everything?

Todd Rosenbluth: I mean, the consumer is the driver of the economy. Again, I’m not qualified to tell you that the consumer is in better shape than the data that you were talking about. But I do know that you can get lots of savings shopping online. So folks looking to spend less can be able to do that from a wide range of different purchases. 

For example, Chewy is one of the larger holdings, or a holding. Not a larger holding — they’re all roughly equally weighted. Chewy is the pet supply company. We use it in our house to get bulk food for my dog. I know you’ve got a new pup.

Chuck Jaffe: I use Chewy, too.

Todd Rosenbluth: We’re doing it because it’s less expensive to order online, in bulk, for what it is that we need, instead of buying, each time, a more moderately sized bag that we can have in our house.

So I think consumers are going to continue to spend. They’re going to spend in a variety of different ways, whether it’s at record levels or not. Online spending continues to trend higher. We think that’s a trend that’s going to continue. And getting the diversification benefits of IBUY, this ETF from Amplify that tracks an index that VettaFi is connected with, is a great way of getting exposure.

Chuck Jaffe: Well, Todd Rosenbluth is saying he might buy at this point. He just made IBUY the ETF of the Week. Todd, great stuff, as always. Thanks so much for joining me. We’ll talk to you again next week.

Todd Rosenbluth: See you soon, Chuck.

Chuck Jaffe: The ETF of the Week is a joint production of VettaFi and Money Life with Chuck Jaffe, and I am Chuck Jaffe.

I’d love it if you want more information, and you checked out my hour-long weekday show, by going to MoneyLifeShow.com, or by searching for wherever you find great podcasts. And of course, if you’re looking for great ETFs and you’re following up on the information you get here, make sure you check out VettaFi.com, where they’ve got everything you need to make yourself a better ETF investor. They’re on Twitter or X at @Vetta_Fi.

Todd Rosenbluth, their head of research, my guest, he’s there too! It’s just his name. He’s at @ToddRosenbluth. The ETF of the Week is here for you every Thursday. Make sure you don’t miss an episode, by following along. And we’ll see you again next week, but until then, happy investing everybody!

For more information, please visit VettaFi.com | ETF Trends.

VettaFi.com is owned by VettaFi LLC (“VettaFi”). VettaFi is the index provider for IBUY, for which it receives an index licensing fee. However, IBUY is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of IBUY.