EBIZ is regaining momentum after a short decline

ETF spotlight: EBIZ

ETF spotlight: EBIZ

Global X E-commerce ETF (EBIZ) shares rose more than a percentage point on Thursday, returning to positive territory for months.

The e-commerce-focused fund has surged about 40% over the past year, trading above $24, on the back of solid consumer spending that is fueling post-Covid-19 U.S. economic growth and driving stocks in the sector higher. This year it has increased by over 20%.

EBIZ fell the previous day along with other major e-commerce companies – First Trust Dow Jones International Internet ETF (FDNI), ARK Fintech Innovation ETF (ARKF), Global X Cloud Computing ETF (CLOU)AND ProShares Online Retail ETF (ONLN)— after e-commerce software maker Shopify Inc. announced disappointing forecasts for the second quarter, and the company’s share price fell by more than 20%.

On Thursday, FDNI, CLOU and ONLN gained again. They have benefited from steady gains from online retail sales and related stocks, which are their main holdings, boosted by surprisingly strong U.S. consumer spending, particularly online. Over the last year, ONLN has increased by over 35%.

Read more: Online retail ETFs fall after Shopify’s earnings

According to the Census Bureau, U.S. e-commerce sales increased 7.6% in 2023, outpacing overall retail sales growth of 2.1%. Globally, e-commerce sales grew faster by 10% and are expected to grow by another 9% this year.

Global EBIZ portfolio

EBIZ, which launched in November 2018 and has approximately $76 million in assets under management, has focused on the growing importance of e-commerce by tracking online sellers, marketplaces and supporting companies – such as software providers – that generate at least 50% of revenue from e-commerce activities.

About two-thirds of its portfolio is made up of U.S.-based companies, but the fund has a global reach. The second largest block of shares – over 4% – is the Singaporean conglomerate Sea Limited. Carvana Co.’s largest holding based in Tempe, Arizona, also accounts for more than 4% of EBIZ’s shares, as does retail giants Inc. and Williams-Sonoma Inc. and Ottawa-based Shopify.

According to Shopify’s Global E-Commerce Sales Growth Report, online sales are expected to “continue to grow and take a larger slice of the retail pie.”

“Global e-commerce sales are projected to grow to $6.86 trillion in 2025, followed by another $550 billion in 2026 to $7.41 trillion. The report shows that global e-commerce retail sales will reach $7.96 trillion by 2027.”

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