IBUY Peaks at Record High on Black Friday

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It’s official. As predicted, Cyber Monday hit a record high with $3.45 billion in online sales. This reflects a 12.1% increase over 2015, and is almost 3% higher than Adobe Digital Insights’ initial prediction.

IBUY, a global, equal-weighted ETF that invests in online retailers, hit an all time high on Black Friday 2016. As e-commerce retailers are anticipated to benefit from the surge in online spending, the fund has already attracted $4.2 million to its asset base following Thanksgiving weekend. IBUY offers widely diversified stocks with each holding no more than 3.6% of assets (i). Top holdings include Etsy (ETSY), an e-commerce website focused on handmade novelties, PetMed Express (PETS), Overstock.com (OSTK), and Nutrisystem (NTRI) (ii).

Earlier this year, the consumer discretionary sector showed a great deal of uncertainty. While wages continued to rise, consumers remained cautious as a result of the 2008 recession As consumers headed into the 2016 holiday buying season relatively stable with a decrease in debt loads and a steady job market, risk to take on debt was still minimal. However, this did not stop a record high consumer spending Thanksgiving weekend (iii).

However, what may have come as the biggest surprise is that Black Friday was not far behind Cyber Monday with only $110 million difference in sales. While Cyber Monday was anticipated to be the highest spending day of the year by a significant margin, online retailers began offering holiday sales later this year creating a higher demand and eagerness for Black Friday deals (v). Many of the large retailers including Target, Macy’s, and Amazon are continuing to offer deals beyond Black Friday and Cyber Monday this year such as “Cyber Week” and “35 Days of Christmas.” Not only does this allow customers more time to save on holiday deals, but also promotes an increase in consumer spending. It also provides a continued growth opportunity for online retail ETFs such as IBUY.

(i) http://www.nasdaq.com/article/4-reasons-to-buy-retail-etfs-this-holiday-season-cm715133

(ii) http://portfolios.morningstar.com/fund/holdings?t=IBUY&region=usa&culture=en-US

(iii) http://www.schwab.com/public/schwab/nn/articles/Consumer-discretionary-sector

(iv) https://www.cnet.com/news/cyber-monday-online-sales-record-beats-black-friday/

(v) http://fortune.com/2016/11/29/cyber-monday-2016-sales/

(vi) https://www.thestreet.com/story/13898884/9/here-are-black-friday-s-biggest-winners-and-losers.html