The E-Commerce Story: A Tale in Three Charts
Snapshots of where the retail industry stands today—and what could be in the cards for tomorrow.
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E-commerce growth is speeding up
Source: U.S. Department of Commerce, May 2020 (adjusted numbers)
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Walmart’s e-commerce business is growing. But at what cost?
Source: Bloomberg 03/31/20. EBITDA defined as earnings before interest, taxes, depreciation and amortization. Walmart is a constituent in the Solactive-ProShares Brick and Mortar Retail Index, an index designed to benefit from the decline of the bricks-and-mortar retailers. Amazon is tracked in the ProShares Online Retail Index, which tracks retailers that principally sell online or through other non-store channels.
What can the departure between two retail-tracking indexes tell us?
Index Performance Since Inception: 11/2017-06/2020
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Source: Bloomberg, as of 6/30/2020. Standardized performance data as of 06/30/2020. For ONLN NAV: 35.38% one-year, 41.89% YTD, 13.80% since inception (07/13/18). ONLN Market Price: 35.58% one-year, 42.20% YTD, 13.83% since inception (07/13/18). CLIX NAV: 33.75% one-year, 48.47% YTD, 25.63% since inception (11/14/17). CLIX Market Price: 32.82% one-year, 48.32% YTD, 25.58% since inception (11/14/17). EMTY NAV: -16.67% one-year, -5.40% YTD, -7.92% since inception (11/14/17). EMTY Market Price -16.82% one-year, -5.46% YTD, -7.96% since inception (11/14/17). Operating Expenses: ONLN 0.58%, CLIX and EMTY 0.65%. 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 ProShares.com. 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.
Retail Disruption: Settle in for the long haul
The growth of e-commerce and struggle of some legacy retailers is a trend that was in place long before stay-at-home orders and may be poised to continue long after the economy is reopened. What’s more, it appears to be an ongoing transformative trend, which may result in long-term investable opportunities.
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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, May 2020; eMarketer May 2019; eMarketer Feb 2019; Statista 2020; CNN, Digital Magazine, Jungleworks, Walmart, Forbes.com.
As of 7/31/20: ONLN has allocations to Amazon 23.12% and 0% allocations to Walmart. CLIX has long side allocations to Amazon 22.48%. CLIX and EMTY have short side allocations to Walmart 2.26%. EMTY has no allocations to Amazon. None of the funds have any holdings in Shopify or Instacart. Holdings are subject to change.
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.