Amplify Online Retail ETF (IBUY) 4th Quarter Commentary 2024
Amplify Online Retail ETF (IBUY) seeks investment results that correspond generally to the price performance of the EQM Online Retail Index. IBUY is a portfolio of companies generating significant revenue from online and virtual sales. Portfolio holdings fall into four categories: traditional retail, marketplace, omnichannel retail and travel.
IBUY returned 5.88% on a net asset value (NAV) compared to its underlying benchmark, the EQM Online Retail Index at 5.91% for the fourth quarter (Q4) 2024. For comparison, the S&P Retail Select Industry Total Return Index returned 3.2%. View Standardized Performance
IBUY’s 2024 performance aligns with the results of this holiday season. Mastercard SpendingPulse data confirmed that online retail remained the top choice among holiday shoppers in 2024, up 6.7% year over year through December 24 vs. only 2.9% for in-store retail.1 The holiday consumer was willing to spend but was searching for value as demonstrated by the most concentrated e-commerce spending occurring during promotional periods.
Low-cost e-commerce firms Shein and PDD (Temu) saw a surge of popularity. Retailers also effectively used artificial intelligence (AI) for customer service and product search along with curbside pick-up and delivery services. Walmart and Amazon saw record breaking results, while Target and Best Buy struggled to drive sales. UBS analysts forecast that about 45,000 retail stores might close in the coming years as retail locations shift to distribution and fulfillment centers and retail experiences an evolution in which only the fittest, like those with multichannel approaches, will survive.2
The latest U.S. Census Bureau data released in November, reveals that e-commerce generated 16.2% of total retail sales in Q3 2024, a gain of 7.4% over Q3 last year boosted by convenience, selection, competitive pricing, flexible shipping and payment options, and technology enhancements like mobile commerce and AI.3
Top performers contributing to returns in Q4 include Affirm (+49%), Upwork (+56%), and Liquidity Services (+42%)Shares of buy-now, pay-later (BNPL) point-of-sale loan provider Affirm continued to gain as it gains market share and nears profitability. A lower interest-rate environment should bolster revenue less transaction costs, and analysts are optimistic about new and expanded partnerships, such as the one with Apple announced in June. Online employment marketplace Upwork reported sales and earnings better than Wall Street estimates and issued strong full-year guidance. Online auction marketplace Liquidity Services surged 40% on news of top- and bottom-line beats. Liquidity Services operates one of the world’s top B2B e-commerce platforms for surplus assets and is known for its contributions to green initiatives and waste reduction.
Detractors on performance for the period included Uber Technologies (-20%), Fitell (-69%), and Beyond (-39%)
Shares of Uber Technologies declined on concern about lost share to robotaxis but have since recovered on an announced share repurchase. New rebalance addition Fitell experienced some profit-taking in Q4 after rising 588% over the last 12 months as an online retailer of fitness equipment and related products. Online home goods retailer Beyond, formerly known as Overstock before acquiring the Bed, Bath & Beyond brand, declined on disappointing quarterly results as it cuts costs and positions for a turnaround.
Visit the IBUY fund page for more information including fact sheets, insights, index methodology, and regulatory documents.
1newsroom.mastercard.com/news/press/2024/december/mastercard-spendingpulse-total-u-s-retail-sales-grew-3-8-this-holiday-season-online-remained-choice-for-consumers-increasing-6-7-yoy/
2retaildive.com/news/over-45000-stores-may-close-five-years-ubs/714567/#:~:text=About%2045%2C000%20retail%20stores%20may,growth%20of%204%25%20by%202028.
3census.gov/retail/mrts/www/data/pdf/ec_current.pdf
Index Definition: An index is unmanaged and it’s not possible to invest directly in an index. The EQM Online Retail Index seeks to measure the performance of global equity securities of publicly traded companies with significant revenue from the online retail business. The S&P Retail Select Industry Index represents the retail sub-industry portion of the S&P TMI. The S&P TMI tracks all the U.S. common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Small Cap exchanges. The Retail Index is an equal weighted market cap index
Carefully consider the Fund’s investment objectives, risks, charges, and expenses before investing. This and other information can be found in the Fund’s statutory and summary prospectuses, which may be obtained at AmplifyETFs.com. Read the prospectus carefully before investing.
Fund inception date: 4/20/2016. Total expense ratio is 0.65%. The performance data quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment 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. For most recent month-end performance, visit AmplifyETFs.com/IBUY. Brokerage commissions will reduce returns. NAV is the sum of all its assets less any liabilities, divided by the number of shares outstanding. The closing price is the last price at which the fund traded.
Investing involves risk, including the possible loss of principal. Narrowly focused investments typically exhibit higher volatility. A portfolio concentrated in a single industry, such as the online retail industry, makes it vulnerable to factors affecting the industry. The Fund may face more risks than if it were diversified broadly over numerous industries or sectors. Investments in consumer discretionary companies are tied closely to the performance of the overall domestic and international economy, interest rates, competition and consumer confidence. Online retail companies are subject to risks of consumer demand and sensitivity to profit margins. Additionally technology and internet companies are subject to rapidly changing technologies; short product life cycles; fierce competition; aggressive pricing and reduced profit margins; the loss of patent, copyright and trademark protections; cyclical market patterns; evolving industry standards; and frequent new product introductions. Information technology companies may be smaller and less experienced companies, with limited product lines, markets or financial resources and fewer experienced management or marketing personnel. Stocks of many internet companies have exceptionally high price-to-earnings ratios with little or no earnings histories. Information technology company stocks, especially those which are internet related, have experienced extreme price and volume fluctuations that are often unrelated to their operating performance.
Amplify Investments LLC serves as the investment adviser to the Fund. Penserra Capital Management LLC serves as investment sub-adviser to the Fund. Amplify ETFs are distributed by Foreside Fund Services, LLC.
Carefully consider the Funds’ investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in Amplify Funds statutory and summary prospectus, which may be obtained by calling 855-267-3837 or by visiting AmplifyETFs.com. Read the prospectus carefully before investing.
Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the Fund. Brokerage commissions will reduce returns.
Amplify ETFs are distributed by Foreside Fund Services, LLC.