Latest / Bloomberg Intelligence / Amplify's Magoon Says Online Retail Can Double or Triple(Audio)

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Amplify's Magoon Says Online Retail Can Double or Triple(Audio) · Bloomberg Intelligence

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  Speaker 1: of Bloomberg One. Taking a look now, pim at retail.
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  Speaker 1: You know what, no matter where you are, you can
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  Speaker 1: go online and buy stuff. I wonder what it means
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  Speaker 1: for brick and mortar people here in Alexandria. Yes, well,
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  Speaker 1: and we know what it means for a lot of
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  Speaker 1: retailers such as Macy's as well as Nordstrom's after learning
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  Speaker 1: about their quarterly results that we'll be speaking with Christian Magoon.
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  Speaker 1: He's the chief executive and the founder of Amplify Investments,
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  Speaker 1: about a new et. Fit's got online retail All right,
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  Speaker 1: continuing our line broadcast here at the Kenton Morrison House
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  Speaker 1: Hotel in Alexandria, Virginia. We're in the Washington metro area
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  Speaker 1: of the nation's capital, home of Bloomberg one. No matter
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  Speaker 1: where you are, retail is certainly a big question right
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  Speaker 1: now for investors and for the markets. Some news out
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  Speaker 1: on e commerce sales. They were up eleven year over
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  Speaker 1: year last month. Sounds good and it is, except it's
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  Speaker 1: the lowest rate of recorded so far this year. Following
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  Speaker 1: a tough month broadly for retails retailers, which we saw
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  Speaker 1: in the government's retail sales last week. We're gonna put
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  Speaker 1: a focus now on e commerce as we introduced our
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  Speaker 1: next guest, Christian Magoon. He's CEO of Amplify Investments. He's
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  Speaker 1: got a new e t F and he's got a
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  Speaker 1: lot to tell us about what's going on with online commerce.
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  Speaker 1: Welcome to the show, Christian, Thanks appreciate you. So how
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  Speaker 1: did you? First of all, let's talk about e commerce
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  Speaker 1: and uh, your new e t F. It's it's unique
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  Speaker 1: and it gives people a chance to invest in e
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  Speaker 1: commerce plays, which you can't do with a lot of
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  Speaker 1: retail sales e t f s. That's right. We saw
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  Speaker 1: an opportunity. Online sales are growing at a pretty a
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  Speaker 1: significant rate in the U s and and globally, and
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  Speaker 1: there wasn't an e t F that really focused on
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  Speaker 1: companies that had a majority of their revenue coming from
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  Speaker 1: online retail sales. So we launched I Buy to take
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  Speaker 1: advantage of that. A company has to have sevent or
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  Speaker 1: more of their revenue from online retail sales to be
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  Speaker 1: in the index and thus in the e t F.
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  Speaker 1: Give us a little bit of your own history, because
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  Speaker 1: you have been an expert and a industry creator in
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  Speaker 1: exchange traded funds. Christian. Yeah, thanks, Pim. I've been doing, uh,
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  Speaker 1: been launching et F since two thousand five. I've launched
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  Speaker 1: over six the e t F in the United States,
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  Speaker 1: many of them first to market products, first solar et F,
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  Speaker 1: the first brick ETF. Uh. This is kind of in
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  Speaker 1: that same line, launching the first online retail ETF, trying
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  Speaker 1: to access a unique market segment that's complementary to the
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  Speaker 1: existing e t F selection that is out there. So
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  Speaker 1: I'm not all about I'm launching e t s for
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  Speaker 1: et F sake. We have to provide new market segments
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  Speaker 1: and exposure, and that's what I Buy did in our opinion.
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  Speaker 1: So e commerce is has certainly grown rapidly, uh, And
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  Speaker 1: it's happening in environment where the traditional brick and mortar
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  Speaker 1: retail part of this was already very overstored, right, and
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  Speaker 1: people are already kind of wondering where we're kind of
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  Speaker 1: fall up there would be we're seeing a lot of
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  Speaker 1: retail bankruptcies this year. How do you how do you
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  Speaker 1: measure e commerce and what do you look for when
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  Speaker 1: you go to put a company in one of your
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  Speaker 1: e t s. But this one in particular, your I
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  Speaker 1: buy Yes, so UM I buy as an index based
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  Speaker 1: e t F. It seeks to track before fees and expenses,
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  Speaker 1: the e q M Online Retail Index. So the index
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  Speaker 1: provider actually has to go into all the retail companies
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  Speaker 1: really globally that meet a minimum market cap and trading
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  Speaker 1: volume history and then go into their balance sheets and
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  Speaker 1: determine the percentage of revenue they receive from online retail sales.
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  Speaker 1: And the benchmark that they've created is a company must
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  Speaker 1: have seventy or more of their sales coming from online
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  Speaker 1: retail to be me and the index. So that involves
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  Speaker 1: a fair amount of going into company financials. It's not
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  Speaker 1: like we're just buying the fifty largest market cap companies
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  Speaker 1: in that space UM and we feel like that's an
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  Speaker 1: item of value to investors. What's interesting is you see
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  Speaker 1: about forty three companies actually qualified globally UM, majority of
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  Speaker 1: them in the US UM Under those criteria. Christian, let
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  Speaker 1: me just throw a couple of names at you just
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  Speaker 1: maybe you can expand on the concept so that we
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  Speaker 1: understand the strategies that are so diverse in the online
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  Speaker 1: retailer and retail space uh EPs, blue Nile, over Stock,
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  Speaker 1: dot Com, grub Hub, uh H s N, price Line,
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  Speaker 1: shutter Flow, eBay, Expedia, Netflix, tell us about how they
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  Speaker 1: all come together Amazon. Right, So there's really three types
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  Speaker 1: of companies in the e t F PIM. The largest
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  Speaker 1: allocation is traditional retailers. It's about six of the e
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  Speaker 1: t F and these are companies like pet meds, UM,
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  Speaker 1: companies like lands and that are doing again seventy or
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  Speaker 1: more of their sales from through an online channel. The
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  Speaker 1: second largest waiting is UM online marketplace companies, and these
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  Speaker 1: are companies that really create a place for you to
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  Speaker 1: buy and sales, so think of eBay, think of etc.
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  Speaker 1: For example. And then the final area is online travel. Expedia,
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  Speaker 1: trip Advisor are are great examples. Priceline again, UM companies
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  Speaker 1: that are providing travel services UM in UM receiving the
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  Speaker 1: majority of their sales from online. So you get a
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  Speaker 1: diverse group of companies UH in these three different market
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  Speaker 1: segments and then about seventy US exposure outside the US.
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  Speaker 1: So what is your bet on online retail? Has it? Uh?
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  Speaker 1: Is it starting to plateau? I mean I still buy
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  Speaker 1: most everything in stores. I may never change much my
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  Speaker 1: daughter buys more online? Uh? Or or do you think
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  Speaker 1: this continues to grow? This play out? Yeah, that's a
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  Speaker 1: great question, Kathleen. Currently, even though a lot of people
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  Speaker 1: are familiar with online retail sales, it's only seven and
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  Speaker 1: a half percent of US total total US retail sales.
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  Speaker 1: So we think they're um this, This has room to
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  Speaker 1: maybe double or triple over the next four or five years,
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  Speaker 1: and we've seen research that supports that. So I think
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  Speaker 1: it continues to grow dramatically. Christian, will you come back
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  Speaker 1: and spend time with us some time in the future,
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  Speaker 1: because I'd love to talk to you about social media
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  Speaker 1: and what you're doing there were you absolutely him? Christian Magoon.
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  Speaker 1: He's the chief executive founder Amplify in Investments, UH, Colorado
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  Speaker 1: springs at Colorado. His Twitter handle at Christian Magoon. You're
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