In recent years, the rise of e commerce has significantly impacted traditional retail sectors. With the convenience of online shopping and the ability to compare prices at the click of a button, many consumers have shifted their purchasing habits away from brick and mortar stores. This trend has had a ripple effect on the retail industry, leading to store closures, bankruptcies, and layoffs.
One way investors can navigate this changing landscape is by considering index funds and exchange traded funds (ETFs) that focus on e commerce and retail. These funds allow investors to gain exposure to a basket of companies in the sector, spreading out risk and potentially benefiting from the growth of e commerce.
One such example is the Amplify Online Retail ETF (IBUY), which tracks the EQM Online Retail Index and includes companies that generate at least 70% of their revenue from online sales. This ETF has seen significant growth in recent years as e commerce continues to expand its market share.
On the other hand, traditional retail focused index funds and ETFs have struggled to keep up with the rapid changes in consumer behavior. Many of these funds have seen declines in value as brick and mortar stores struggle to compete with online retailers.
Investors looking to capitalize on the growth of e commerce while still maintaining exposure to traditional retail sectors may consider a diversified approach. This could involve investing in a mix of e commerce focused and traditional retail focused funds to balance out the potential risks and rewards.
Overall, the impact of e commerce growth on traditional retail sectors is undeniable. By exploring index funds and ETFs that focus on both areas, investors can position themselves to potentially benefit from the changing landscape of the retail industry.