E-commerce, including online shopping and other online transactions, is an ever-increasing part of the economy. Online shopping and processing online payments are convenient for people around the world, so it’s easy to see why the e-commerce industry is popular.
Best Exchange-Traded Funds for E-commerce in 2022
After researching exchange-traded funds for e-commerce, we narrowed down the list of funds that may be best for your portfolio. Presented in no particular order and based on each fund’s costs, historical performance, and diversification across different types of companies, these are the best exchange-traded funds for e-commerce that investors should consider.
Amplify Online Retail ETF (IBUY)
If you want to invest purely in e-commerce, the Amplify Online Retail ETF (IBUY) may be a good option for your portfolio. This fund invests in companies that derive more than 70% of their revenues from online sales.
It also has a reasonable expense ratio of 0.65% – which translates to $6.50 on an investment of $1,000. Its three-year return on investment as of September 30, 2021, was 28.5%, which is the highest ROI on our list. The fund boasts good diversification, with major components including well-known companies in apparel, shipping, and food delivery like Etsy (2.9%), Doordash (2.9%), and Revolve (2.9%).
ProShares Online Retail ETF (ONLN)
The ProShares Online Retail ETF (ONLN) is another fund that primarily focuses on companies that sell products online. While its expense ratio is lower than the Amplify Online Retail ETF’s, it also has a less diversified portfolio. It holds a large portion of its assets in large e-commerce companies like Amazon (23.7%), Alibaba (13.5%), and eBay (4.9%), so it may not be a good option for those wanting diversification. The fund returned 20.1% over the past three years and has an expense ratio of 0.58%, or $5.80 for every $1,000 invested.
Emerging Markets Internet + Ecommerce ETF (EMQQ)
The Emerging Markets Internet + Ecommerce ETF (EMQQ) focuses on online companies outside the U.S. It is more expensive than some other funds, charging an expense ratio of 0.86% (the highest on our list at $8.60 for every $1,000 invested), and also has a lower three-year return than the other exchange-traded funds in this list.
However, if you are looking to gain exposure to technology companies in other countries, this fund could be a good option for your portfolio. Most of the fund’s assets are invested in Chinese companies, but it also holds stakes in companies from South Korea, India, Argentina, South Africa, Brazil, and Singapore, providing you with strong international diversification.
Invesco NASDAQ Internet ETF (PNQI)
The Invesco NASDAQ Internet ETF (PNQI) is an option if you want broader exposure to internet companies rather than investing in a fund that focuses solely on companies selling goods directly to consumers online. This includes service providers like web hosts and search engines, in addition to retail traders. Top components include Adobe (8.1%), Amazon (7.9%), and Alphabet (7.9%), among others.
It is one of the oldest exchange-traded funds on our list, making it slightly more stable. It has a reasonable expense ratio of 0.60% ($6 on an investment of $1,000) and returned 20.9% over the past three years as of September 30, 2021.
ETFMG Prime Mobile Payments ETF (IPAY)
The ETFMG Prime Mobile Payments ETF (IPAY) has the second-highest expense ratio on our list at 0.75% ($7.50 for every $1,000), and its three-year returns as of September 30, 2021, may be on the lower end at 16.7%, but exposure to large companies facilitating online payments may be worth it in the long run.
Paying
Individuals are a key part
Source: https://www.thebalancemoney.com/best-ecommerce-etfs-5207429
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