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Sam Subramanian

E-commerce ETF and E-commerce Fund: Two Investments to Profit from Guaranteed Growth

Sam Subramanian PhD, MBA

During times when sustained growth of the U. S. economy appears less than certain, e-commerce ETF and e-commerce fund represent two investments that can deliver solid gains from virtually assured growth of the e-commerce industry.

According to Forrester Research, the U. S. e-commerce industry grew 12.6% in 2010 to $176 billion. The market research firm expects the U. S. e-commerce industry to expand by 60% to $279 billion in 2015.

The growth of e-commerce in retailing & entertainment, advertising, and travel can support the industry's expansion.

E-commerce Stocks in Retailing & Entertainment

The number of consumers shopping online is increasing as unemployment levels rise, transportation costs soar, and e-retailers provide incentives like free shipping. Smartphones and tablet computers are the most popular items sold online.

Improvement in download speed and reliability is prompting increasing number of consumers to fulfill their entertainment wants online. Purchases or renting of books, music, video, and games are rapidly moving online.

Amazon.com (AMZN) and eBay (EBAY) are dominant online retailers while Netflix (NFLX) has entrenched itself in online movie delivery. Groupon, which is reshaping e-commerce with short-life discount coupons from local stores, has filed an S-1 with the intent of becoming public.

E-commerce Stocks in Advertising

Online ad spending in the U. S. is poised for strong growth as more people spend more time online. eMarketer forecasts ad spending to increase by over 20% to $31 billion in 2011 as new formats like video and new channels like mobile and social media gain adoption.

While search accounts for a major share today, growing popularity of video and brand-building ads is helping display ad spending to power ahead. Spending on display ads is expected to exceed spending on search ads by 2015.

Investment opportunities here include shares of search leaders Google (GOOG), Yahoo! (YHOO), and Microsoft (MSFT). Smaller service providers like ValueClick (VCLK) represent potential takeover plays. Facebook and LinkedIn (LNKD) are capitalizing on the growing popularity of social media.

E-commerce Stocks in Travel

eMarketer estimates online sales of leisure and unmanaged business travel in the U. S. will increase 8.5% this year on higher airfares, hotel rates, and ancillary fees. Nearly 11.8 million new users are forecasted to make their travel booking through mobile devices.

Overseas, online airline ticket purchases and hotel reservations are increasing at a breakneck pace. Growth is notably strong in China, South Korea, Brazil, Russia and India from both increasing domestic and international travel.

Online travel and related services companies like Expedia (EXPE), priceline.com (PCLN), and to a lesser extent Orbitz Worldwide (OWW) stand to benefit from the increase in online bookings.

Investing in E-commerce ETF and E-commerce Fund

E-commerce ETF Examples

First Trust DJ Internet Index ETF, FDN

PowerShares NASDAQ Internet, PNQI

 

E-commerce Fund Examples

Fidelity Select IT Services, FBSOX

Fidelity Select Software, FSCSX

Firsthand Technology Opp Fund, FTEQX

Internet UltraSector ProFund, INPIX

Jacob Internet, JAMFX

Kinetics Internet, WWWFX

Rydex Internet, RYIIX

You can profit from the e-commerce industry's growth by investing in e-commerce stocks mentioned above. However, investing in an individual e-commerce stock carries company-specific risk. You can reduce such risk by investing in e-commerce sector ETFs and sector mutual funds. E-commerce ETF and e-commerce fund examples are provided in the inserts.

Beat the Market with Best E-commerce ETF and E-commerce Fund Investments

While secular growth characteristics make e-commerce ETF and e-commerce fund investments suitable for long-term investing, you can use such investments as part of a broader sector investing strategy to earn bigger rewards.

Like most sector investments, e-commerce ETF and e-commerce fund investments periodically come in and go out of favor based on investor’s view of near-term prospects for e-commerce stocks.

AlphaProfit's Premium Service helps you invest in the best e-commerce ETF and the best e-commerce fund at the right time. When the timing is just not right for e-commerce ETF and e-commerce fund investments, you will stay away from them and invest in only the best sector ETFs and best sector mutual funds in top ranked sectors.

The sector ETF and sector fund model portfolios use AlphaProfit's proven ValuM investment process for selecting investments. This process has enabled AlphaProfit model portfolios to bag Dow Jones Hulbert Financial's #1 rank numerous times.

ETF Model Portfolio Investment Process Selection - User Quotes

A dollar invested in the AlphaProfit's Aggressive Growth (ETF-Focus) and Capital Appreciation (ETF-Core) model portfolios is worth $45.65 and $22.58, respectively. This implies annualized returns of 20.2% and 16.2%, respectively.

Performance of ETF model portfolio driven by disciplined investment process
Performance of ETF model portfolio driven by disciplined investment process

Performance of ETF model portfolios as of September 30, 2014.

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Comparable investments in the Dow Jones Wilshire 5000 and S&P 500 benchmarks are worth $6.42 and $6.32, respectively implying annualized returns of 9.4% and 9.3%, respectively.

Learn 5 Smart Ways of Using Sector ETFs and Sector Funds

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About AlphaProfit MoneyMatters and AlphaProfit
AlphaProfit MoneyMatters is a free e-letter distributed to registered users of AlphaProfit's website. The e-letter analyzes the economy, markets, and sectors and provides money-making insights on stocks, exchange-traded funds, and mutual funds. AlphaProfit MoneyMatters is edited by Dr. Sam Subramanian acclaimed for his financial acumen and analytical skills.

AlphaProfit Investments, LLC is an independent investment research firm based in Sugar Land, TX. AlphaProfit publishes the AlphaProfit Sector Investor's Newsletter, edited by Dr. Sam Subramanian. Leveraging sector funds, the Newsletter provides high-performance model portfolios with Fidelity funds and exchange-traded funds. It also includes actionable stock recommendations. This newsletter features among MarketWatch's top 10 investment newsletters and has won the coveted #1 rank from Hulbert Financial several times.


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