If there’s one trend that remains a powerful force in markets worldwide, it’s e-commerce. Consumers love the ability to click three buttons on any of the biggest platform sites and get what they want in a few days or sometimes hours. Few trends can claim such a widespread reach, with firms from East Asia to South America to Europe and North America all in contention. For investors, then, it may be worth visiting the E-commerce ETF space, with one fund therein spiking entering the Fall.
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That fund, the First Trust S-Network E-Commerce ETF (ISHP ), has returned 12.6% over the last month per ETF Database data. Per YCharts, that has helped the fund outperform the MSCI World Net Total Return Index (MSWNTR), which has returned just 4.4% in that time frame. The E-commerce ETF has outperformed that index over six months, too.
E-commerce ETF ISHP's Approach
The strategy charges a 60 basis point (bps) fee to track the S-Network Global E-Commerce Index. That index tracks an index of the largest firms in the global e-commerce space. It looks for firms active in online retail, e-commerce infrastructure, and content navigation. The latter of that trio focuses on deriving revenues from advertisers paying to use search results, email, social media, and more to target ads. ISHP takes the top four firms from each of its target subsectors and weights them equally.
The e-commerce ETF’s global view includes names like MercadoLibre (MELI), a key e-commerce platform in South America. At the same time, it also includes names like Taiwan Mobile (TAI), an important mobile phone name in Taiwan.
Together, firms like those can provide a solid amount of U.S. diversification. At the same time, they offer exposure to a rising class of global consumers. For those looking at ETFs on the rise, ISHP may stand out.
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VettaFi LLC (“VettaFi”) is the index provider for AMLP, VFLO, IBUY, ROBO, QGRO, and SBIO, for which it receives an index licensing fee. However AMLP, VFLO, IBUY, ROBO, QGRO, and SBIO are 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 AMLP, VFLO, IBUY, ROBO, QGRO, and SBIO.
