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

You know what, no matter where you are, you can go online and buy stuff. I wonder what it means for brick and mortar people here in Alexandria. Yes, well, and we know what it means for a lot of retailers such as Macy's as well as Nordstrom's after learning about their quarterly results that we'll be speaking with Christian Magoon. He's the chief executive and the founder of Amplify Investments,

about a new et. Fit's got online retail All right, right now, let's got Charlie Pelletan the Bloomberg News and for Bloomberg Business FLA and I thank you Tim, Thank you Kathleen. Stocks aren't trading at the worst level of the day. This update brought to you by Pershing's Insight sixteen conference, a must attend for advisers June seventh through the ninth in Orlando, Florida. Register at Insight dot com. That is I N S, I T E twenty six

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I'm Charlie Palette. That's a Bloomberg Business flash bus. He's taking stoff with Kathleen Hayes and Pim Box on Bloomberg Radio, continuing our line broadcast here at the Kenton Morrison House Hotel in Alexandria, Virginia. We're in the Washington metro area of the nation's capital, home of Bloomberg one. No matter where you are, retail is certainly a big question right now for investors and for the markets. Some news out on e commerce sales. They were up eleven year over

year last month. Sounds good and it is, except it's the lowest rate of recorded so far this year. Following a tough month broadly for retails retailers, which we saw in the government's retail sales last week. We're gonna put a focus now on e commerce as we introduced our next guest, Christian Magoon. He's CEO of Amplify Investments. He's got a new e t F and he's got a lot to tell us about what's going on with online commerce. Welcome to the show, Christian, Thanks appreciate you. So how

did you? First of all, let's talk about e commerce and uh, your new e t F. It's it's unique and it gives people a chance to invest in e commerce plays, which you can't do with a lot of retail sales e t f s. That's right. We saw an opportunity. Online sales are growing at a pretty a significant rate in the U s and and globally, and there wasn't an e t F that really focused on companies that had a majority of their revenue coming from online retail sales. So we launched I Buy to take

advantage of that. A company has to have sevent or more of their revenue from online retail sales to be in the index and thus in the e t F. Give us a little bit of your own history, because you have been an expert and a industry creator in exchange traded funds. Christian. Yeah, thanks, Pim. I've been doing, uh, been launching et F since two thousand five. I've launched over six the e t F in the United States, many of them first to market products, first solar et F,

the first brick ETF. Uh. This is kind of in that same line, launching the first online retail ETF, trying to access a unique market segment that's complementary to the existing e t F selection that is out there. So I'm not all about I'm launching e t s for et F sake. We have to provide new market segments and exposure, and that's what I Buy did in our opinion.

So e commerce is has certainly grown rapidly, uh, And it's happening in environment where the traditional brick and mortar retail part of this was already very overstored, right, and people are already kind of wondering where we're kind of fall up there would be we're seeing a lot of

retail bankruptcies this year. How do you how do you measure e commerce and what do you look for when you go to put a company in one of your e t s. But this one in particular, your I buy Yes, so UM I buy as an index based e t F. It seeks to track before fees and expenses,

the e q M Online Retail Index. So the index provider actually has to go into all the retail companies really globally that meet a minimum market cap and trading volume history and then go into their balance sheets and determine the percentage of revenue they receive from online retail sales. And the benchmark that they've created is a company must have seventy or more of their sales coming from online retail to be me and the index. So that involves

a fair amount of going into company financials. It's not like we're just buying the fifty largest market cap companies in that space UM and we feel like that's an item of value to investors. What's interesting is you see about forty three companies actually qualified globally UM, majority of

them in the US UM Under those criteria. Christian, let me just throw a couple of names at you just maybe you can expand on the concept so that we understand the strategies that are so diverse in the online retailer and retail space uh EPs, blue Nile, over Stock, dot Com, grub Hub, uh H s N, price Line, shutter Flow, eBay, Expedia, Netflix, tell us about how they all come together Amazon. Right, So there's really three types of companies in the e t F PIM. The largest

allocation is traditional retailers. It's about six of the e t F and these are companies like pet meds, UM, companies like lands and that are doing again seventy or more of their sales from through an online channel. The second largest waiting is UM online marketplace companies, and these are companies that really create a place for you to buy and sales, so think of eBay, think of etc. For example. And then the final area is online travel. Expedia,

trip Advisor are are great examples. Priceline again, UM companies that are providing travel services UM in UM receiving the majority of their sales from online. So you get a diverse group of companies UH in these three different market segments and then about seventy US exposure outside the US. So what is your bet on online retail? Has it? Uh? Is it starting to plateau? I mean I still buy most everything in stores. I may never change much my daughter buys more online? Uh? Or or do you think

this continues to grow? This play out? Yeah, that's a great question, Kathleen. Currently, even though a lot of people are familiar with online retail sales, it's only seven and a half percent of US total total US retail sales. So we think they're um this, This has room to maybe double or triple over the next four or five years, and we've seen research that supports that. So I think

it continues to grow dramatically. Christian, will you come back and spend time with us some time in the future, because I'd love to talk to you about social media and what you're doing there were you absolutely him? Christian Magoon. He's the chief executive founder Amplify in Investments, UH, Colorado springs at Colorado. His Twitter handle at Christian Magoon. You're

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