Online Retail: A Transformational Trend and a Reopening Trade All in One

February 2021

Many investors are struggling with the persisting tension between a still-present pandemic and a vaccine-driven reopening potentially on the horizon. Are companies with business models that thrived in the pandemic the best bet? Or is it time to invest in companies that may be outsized beneficiaries of a reopening? Clearly, online retailers were well positioned for the pandemic as bricks-and-mortar stores were forced to close, but investors may be underestimating online retail’s ability to benefit from the economy’s reopening.

It’s a Glass Half- Full for Retail Sales, but the Cup Runneth Over for Online Retail

A weak quarter-over-quarter increase in retail sales drove headlines declaring 2020’s holiday season a disappointment, but strong year-over- year increases suggested a healthy consumer, despite the pandemic headwinds. Notably, the outsized growth of online retail was the big story.

The Consumer Is Poised to Spend – and They Likely Won’t Stop Spending Online

From the outset of the pandemic through December 2020, as a group, U.S. consumers saved nearly 18% of their disposable income, far greater than the average of the prior five years of just over 7%. An end to the pandemic that potentially prompts spending some of these savings will likely benefit bricks-and-mortar and e-commerce. Even as “normal” activity resumes, there is no reason to think online retail won’t continue to increase its share of the retail pie, although perhaps not at the same growth rate of 2020. Remember, according to the quarterly e-commerce report released in February 2021 from the U.S. Department of Commerce, e-commerce sales accounted for only about 14% of total retail sales in the U.S. To illustrate this, we can look at how two retail indexes performed: the ProShares Online Retail Index, which tracks retailers that principally sell online or through other non-store channels, and the Solactive-ProShares Bricks and Mortar Index, composed solely of traditional retailers—including some with e-commerce operations. The ProShares Online Retail Index outperformed the S&P 500 and the Solactive-ProShares Bricks and Mortar Index, not only when many bricks-and mortar retailers were dealing with restrictions on opening physical stores, but also when lockdowns eased, and broad bricks-and-mortar retail stocks rebounded on the news of reopenings.

Standardized performance data as of 12/31/2020. For ONLN NAV: 111.37% one-year, 111.37% YTD, 30.25% since inception (07/13/18). ONLN Market Price: 111.87% one-year, 111.87% YTD, 30.29% since inception (07/13/18). CLIX NAV: 91.05% one-year, 91.05% YTD, 33.64% three-year, 31.26% since inception (11/14/17). CLIX Market Price: 90.95% one-year, 90.95% YTD, 33.56% three-year, 31.23% since inception (11/14/17). EMTY NAV: -31.80% one-year, -31.80% YTD, -11.58% three-year, -15.95% since inception (11/14/17). EMTY Market Price -31.92% one-year, -31.92% YTD, -11.57% three-year, -16.02% since inception (11/14/17).Operating Expenses: ONLN 0.58%, CLIX 0.65% and EMTY 0.66%. Performance quoted represents past performance and does not guarantee future results. Investment return and principal value will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month-end may be obtained at Index returns are for illustrative purposes only and do not represent fund performance. Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged, and one cannot invest directly in an index.

Online Retail – More Than Just Amazon

A few decades ago, Walmart did not put every bricks-and-mortar retail chain out of business as was feared at the time. Similarly, today there are many online retailers that are thriving alongside Amazon. In fact, while Amazon’s stock performed quite well in 2020, it underperformed the ProShares Online Retail Index, of which it accounts for 23.33% as of 12/31/2020. Companies like Chewy, Wayfair, Etsy and Stitch Fix are among the many companies that outperformed the index, and each has its own unique competitive advantages and moats. The breadth of online retail as an industry, and the select companies tracked by the ProShares Online Retail Index, may be another important post-pandemic driver of growth.


Index constituents are subject to change. None of the above holdings are in the Solactive-ProShares Bricks and Mortar Index

Invest in Retail Disruption

ProShares offers three ETFs that enable investors to tap into the long-term trends of retail disruption. Explore the suite of products.

Lets investors potentially benefit from both the potential growth of online companies and the decline of bricks-and-mortar retailers through a long/short construction.

Tracks retailers that principally sell online or through other non-store channels

Is a dedicated short fund designed to benefit from the decline of traditional bricks-and-mortar retailers

Sources: U.S. Department of Commerce, November 2020; Bloomberg.

Fund allocations as of 12/31/2020: ONLN: Fiverr International Ltd 0.88%, Inc 2.65%, Farfetch Ltd 2.42%, Pinduoduo Inc 2.46%, Etsy Inc 5.40%, Magnite Inc 4.45%, Chewy Inc 5.59%, MercadoLibre Inc 2.32%, Quarte Retail Inc 4.02%, Wayfair Inc 3.90%, Inc 1.95%, Inc 4.59%, Stitch Fix Inc 4.61%, Dada Nexus Ltd 1.05%, 23.28%, Walmart 0%. CLIX long side exposure: Fiverr International Ltd 0.87%, Inc 2.65%, Farfetch Ltd 2.41%, Pinduoduo Inc 2.45%, Etsy Inc 5.39%, Magnite Inc 4.44%, Chewy Inc 5.57%, MercadoLibre Inc 2.31%, Quarte Retail Inc 4.01%, Wayfair Inc 3.89%, Inc 1.94%, Inc 4.58%, Stitch Fix Inc 4.60%, Dada Nexus Ltd 1.05%, 23.23%. CLIX short side exposure: Walmart 2.09%. EMTY: 2.09% to Walmart and 0% to Fiverr International Ltd, Inc, Farfetch Ltd, Pinduoduo Inc, Etsy Inc, Magnite Inc, Chewy Inc, MercadoLibre Inc, Quarte Retail Inc, Wayfair Inc, Inc, Inc, Stitch Fix Inc, Dada Nexus Ltd, and 

 Holdings are subject to change. Please visit for the most up to date information.

Any forward-looking statements herein are based on expectations of ProShare Advisors LLC at this time. ProShare Advisors LLC undertakes no duty to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Investing is currently subject to additional risks and uncertainties related to COVID-19, including economic, market and business conditions; changes in laws or regulations or other actions made by governmental authorities or regulatory bodies; and world economic and political developments.

ProShares EMTY seeks a return that is -1x the return of an index (target) for a single day, as measured from one NAV calculation to the next. Due to the compounding of daily returns, EMTY's returns over periods other than one day will likely differ in amount and possibly direction from the target return for the same period. Investors should monitor their holdings consistent with their strategies, as frequently as daily. For more on correlation, leverage and other risks, please read the prospectus.

Investing involves risk, including the possible loss of principal. These ProShares ETFs are non-diversified and entail certain risks, which may include risks associated with the use of derivatives (such as swap agreements, futures contracts and similar instruments), imperfect benchmark correlation, leverage and market price variance, all of which can increase volatility and decrease performance. 

EMTY seeks short exposure and should lose money when its index rises. CLIX’s short positions are not intended to hedge the portfolio in market downturns, but rather to allow stocks with unfavorable outlooks to contribute to performance. Short positions lose value as security prices increase.

 Investments in the consumer discretionary and retailing industries are subject to risks such as changes in domestic and international economies, interest rates, competition and consumer confidence; disposable household income; consumer tastes and preferences; intense competition; changing demographics; marketing and public perception; and dependence on third-party suppliers and distribution systems. Investments in smaller companies typically exhibit higher volatility. 

Smaller company stocks also may trade at greater spreads or lower trading volumes, and may be less liquid than stocks of larger companies. 

ONLN and CLIX invest in international investments, which may involve risks from: geographic concentration, differences in valuation and valuation times, unfavorable fluctuations in currency, differences in generally accepted accounting principles, and from economic or political instability. In emerging markets, many risks are heightened, and lower trading volumes may occur. Please see their summary and full prospectuses for a more complete description of risks. There is no guarantee any ProShares ETF will achieve its investment objective.

"Solactive AG," a registered trademark of Solactive AG, and the Solactive-ProShares Bricks and Mortar Retail Store Index have been licensed for use by ProShare Advisors LLC. Solactive AG serves as index calculation agent for the ProShares Long Online/Short Stores Index, ProShares Online Retail Index and Solactive-ProShares Bricks and Mortar Retail Store Index, and performs routine daily calculations and maintenance (e.g., reconstitution, rebalancing, and corporate actions). Solactive AG uses its best efforts to ensure that these indexes are calculated correctly. Solactive AG has no obligation to point out errors in the indexes to third parties, including but not limited to investors and/or financial intermediaries. Neither the ProShares Decline of the Retail Store ETF ("EMTY") nor the ProShares Long Online/Short Stores ETF (CLIX) are sponsored, endorsed, sold, or promoted by Solactive AG and they make no representation regarding the legality or suitability of the funds, or the advisability of investing in the funds. SOLACTIVE AG AND ITS AFFILIATES MAKE NO WARRANTIES, EXPRESS OR IMPLIED, AND BEAR NO LIABILITY WITH RESPECT TO THE INDEXES, PROSHARES, OR THE FUNDS.

Carefully consider the investment objectives, risks, charges and expenses of ProShares before investing. This and other information can be found in their summary and full prospectuses. Read them carefully before investing.

ProShares are distributed by SEI Investments Distribution Co., which is not affiliated with the funds' advisor or sponsor.

Your use of this site signifies that you accept our Privacy Policy and Terms and Conditions of Use.