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Magoon on Opportunities in Retail Sector (Audio) · Bloomberg Intelligence

• 0:01
  Speaker 1: He is taking stock with Kathleen Hayes and Pim Fox
• 0:05
  Speaker 1: on Bloomberg Radio. Investing in retail it might not involve
• 0:10
  Speaker 1: investing in companies such as Macy's or Nordstrom. It may
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  Speaker 1: involve retail me not Etsy, grub Hub and eBay. Here
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  Speaker 1: to tell us more, Christian Magoon. He is the chief
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  Speaker 1: executive officer and the founder of Amplify Investments. He joins
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  Speaker 1: us from Wheaton, Illinois. Christian, thanks very much for being
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  Speaker 1: with me. Great to be back, Pim, thank you for
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  Speaker 1: having me. Tell tell us a little bit about the
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  Speaker 1: Amplify I Buy I b U y E t F
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  Speaker 1: and how it differs from a more traditional E t
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  Speaker 1: F that focuses on retail, such as the x RT
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  Speaker 1: that's the SMP retail E t F. Yeah. Absolutely, And
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  Speaker 1: you know we've seen in the headlines that traditional retailers
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  Speaker 1: are really feeling the pain, whether we're talking about Macy's
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  Speaker 1: or Target to recent examples, UM consumers are changing their
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  Speaker 1: preferences and they're going less and less to brick and
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  Speaker 1: mortar stores and more and more on to online stores.
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  Speaker 1: And our online retail et F ticker I buy uh
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  Speaker 1: focuses on companies retailers that have se or more of
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  Speaker 1: their revenue coming from online sales, and this is the
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  Speaker 1: area that's growing in retail. Retail is kind of a
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  Speaker 1: hated sector, but that's because most people think of these
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  Speaker 1: traditional brick and mortar companies. UH. What's actually doing very
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  Speaker 1: well or quite well in the retail space and having
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  Speaker 1: positive performance are online retailers. And that's really where this
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  Speaker 1: ETS sets itself apart. It's about eight different in terms
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  Speaker 1: of its portfolio makeup than a traditional retail if E
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  Speaker 1: t F for example. So we really think that the
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  Speaker 1: opportunity going forward and even today is in online retail
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  Speaker 1: companies and UH, this ETF offers a one stop way
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  Speaker 1: of accessing UH companies around the world that have that
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  Speaker 1: revenue source. Christian, are you using the term retail in
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  Speaker 1: its broadest sense? Because the largest holding, for example, UH
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  Speaker 1: in recent filing is retail me not, followed by Etsy
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  Speaker 1: and then grub hub, which is online food ordering site
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  Speaker 1: eBay which offers not their own products but products from
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  Speaker 1: third party vendors. So is retail now just a completely
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  Speaker 1: different UH description because you've got Netflix in there as well. Yes,
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  Speaker 1: So we categorize online retail into the really three areas
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  Speaker 1: Traditional retailers UM so companies like a Blue Nile or
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  Speaker 1: lands In or an overstock or a Wayfair UH companies
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  Speaker 1: that are selling traditional goods and services via online channels
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  Speaker 1: and that have sevent or more of their revenue from
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  Speaker 1: online sales. So that's the largest percentage of the funds
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  Speaker 1: waiting about fift as a end of June. And then
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  Speaker 1: the two other areas are marketplace companies within retail. So
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  Speaker 1: when you think of marketplace, you think of grub Hub,
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  Speaker 1: ets Ali Baba, Mercado Libre. And then the other last
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  Speaker 1: area is h the smallest portion of the portfolio travel companies,
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  Speaker 1: so the price lines of the world trip Advisor. It
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  Speaker 1: really it's where are people doing their kind of buying
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  Speaker 1: and selling in the retail space. And we've roddened it out,
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  Speaker 1: so to speak, to include some of these UM sub
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  Speaker 1: sectors within retail UM that are really focused on driving
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  Speaker 1: sales and revenue through the online model. The online model
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  Speaker 1: just seems to offer better pricing, more selection and convenience,
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  Speaker 1: and it seems to be trumping kind of traditional bricket
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  Speaker 1: mortar retail both in terms of consumer preference, in terms
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  Speaker 1: of its growth, but also in terms of the stock
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  Speaker 1: performance of these uh kind of unique businesses. Well, just
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  Speaker 1: to give the return so far in the month, up
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  Speaker 1: seven percent, the three month return up a little bit more,
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  Speaker 1: up a little bit more than fifteen per cent. When
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  Speaker 1: did this start trading? Yes, in April April, the Amplify
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  Speaker 1: Online Retail et F ticker i by launched on the
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  Speaker 1: NASDAC as an exchange traded fund. It's an index based
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  Speaker 1: exchange traded fund, and um, you know it's it's had
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  Speaker 1: some significant performance. It's gained a little bit more than
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  Speaker 1: eight percent since it's launched. That compares to, for example,
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  Speaker 1: the largest traditional retail et S in the marketplace, the
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  Speaker 1: Spider Retail et F ticker x RT, which during that
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  Speaker 1: same time period is gained about eighty one basis points,
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  Speaker 1: or about one per cent. So there's about a hundred
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  Speaker 1: or eight hundred basis points out performance we're seeing from
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  Speaker 1: these online retail companies and we really think it's the
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  Speaker 1: hidden gem in this unloved sector of retail. Now, you
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  Speaker 1: also in your past, I think it was in two
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  Speaker 1: thousand six, you start Claymore e t s correct, which
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  Speaker 1: was then sold to Guggenheim. That's right, So yeah, I
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  Speaker 1: started the e t F product line at Claymore, which
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  Speaker 1: is now owned by Guggenheim Investments, and launched about six
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  Speaker 1: d e t s, many of them first to market
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  Speaker 1: that we've talked about over time, and you know, we
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  Speaker 1: were We've been involved in the first cybersecurity e t
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  Speaker 1: F that launched several years ago, the first solar et FU.
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  Speaker 1: Variety of different kind of first to markets and that's
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  Speaker 1: really our our our mission here and amplifies to christ
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  Speaker 1: I just gotta I just gotta jump in because you
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  Speaker 1: don't have a lot of time. I just want your
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  Speaker 1: quick thoughts here. Isn't it also a big challenge for
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  Speaker 1: you to get some volume on this e t F.
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  Speaker 1: I mean you're trading like a thousand shares it volume
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  Speaker 1: on platforms. That's the biggest challenge. Isn't it give you
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  Speaker 1: that tense right especially during summer that the volume is
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  Speaker 1: is a tough thing. But we think the performance will
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  Speaker 1: start to attract that volume. Uh and Uh, we're really
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  Speaker 1: excited about what the fall is gonna lead to because
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  Speaker 1: it's great season for retail and we think online retail
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  Speaker 1: will have an accelerated fall as well. We've got to
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  Speaker 1: leave it there thanks very much. Christian Magoon he is
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  Speaker 1: the chief executive and the founder of Amplify Investments. They're
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  Speaker 1: based in Wheaton, Illinois. This is Bloomberg.