Internet ETFs Looking Great Bets Amid Omicron Uncertainty
Zacks Investment Research | Dec 07, 2021 05:00AM ET
The ongoing pandemic and discovery of new variants are subtle reminders that the dependency on the Internet might increase with time instead of reducing. There is a lot of uncertainty surrounding the severity of the Omicron variant, which might once again bring the Internet ETFs in focus to rake in some good returns.
The pandemic has been a blessing in disguise for the e-commerce industry to date as people continue to practice social distancing and shop online for all essentials, especially food items. Thus, in sync with the digitization trend, the upcoming U.S. holiday season is expected to see a significant surge in online sales. The National Retail Federation projects online and other non-store sales increase of 11-15% to reach between $218.3 billion and $226 billion in 2021 compared with $196.7 billion registered in 2020.
Expanding digitization and the growing dependency on the Internet owing to some new normal trends like work from home, digital payments, digitization of healthcare, rising demand for video gaming among others are painting a rosy picture for the space.
The world is gradually moving toward digitization, increasing the dominance of technology in the financial sector. A Market Data Forecast (MDF) report also highlights the growing opportunities in the global financial technology market, which is expected to see a CAGR of 23.4% between 2021 and 2026. According to the report, the fintech space is expected to reach a market value of around $324 billion by 2026.
With an increased level of interest in online shopping, customers are resorting to digital payments to clear their bills. At the same time, merchants and utility providers are increasingly advocating the same. Payment services from tech titans like Google (NASDAQ:GOOGL) Pay, Facebook (NASDAQ:FB) Pay, Apple (NASDAQ:AAPL) Pay, Amazon (NASDAQ:AMZN) Pay, PayPal (NASDAQ:PYPL) and Square Inc.’s (NYSE:SQ) Cash App are the key winners amid the increasing shift to digital payments.
Industries like cloud computing have been thriving, with most people working from home. Even though the vaccine rollout has begun globally, demand for cloud computing is set to stay robust even beyond the pandemic. In the wake of the pandemic, cloud technology adoption is projected to witness robust growth in sectors where the work-from-home initiatives are sustaining business functions.
Video-gaming lovers in the United States spent generously in October again. The industry continues to gain amid the health crisis. For 10 months, the total consumer spending on gaming is up 12% year over year to $46.67 billion (per The NPD Group data). Market experts are optimistic about the video gaming industry's strength in terms of solid sales growth despite tough year-over-year comparisons, highlighting the momentum in the space.
h3 Internet ETFs to Gain/h3Against this backdrop, let’s look at some Internet ETFs that will continue to gain from increasing demand for online gaming, shopping, video streaming and work-from-home trends due to the coronavirus crisis:
First Trust Dow Jones Internet Index Fund OGIG
O’Shares Global Internet Giants ETF is a rules-based ETF designed to provide investors with the means to invest in some of the largest global companies that derive most of their revenues from the Internet and e-commerce sectors that exhibit quality and growth potential. OGIG has AUM of $500.9 million with an expense ratio of 48 bps.
Get The News You Want
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Zacks Investment Research
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.