Online Retail ETFs Rise After Robust Black Friday

Consumers opened their wallets on Black Friday, a good sign for the all-important holiday shopping season. 

While the trend toward buying more online continued, physical stores also saw some growth. 

According to Mastercard SpendingPulse, U.S. retail sales on Friday, Nov. 29 increased by 3.4% year-over-year. That breaks down to an 14.6% gain for e-commerce sales and a 0.7% gain for in-store sales.  

“Black Friday was a good indicator of how the holiday season is positively shaping up,” said Michelle Meyer, chief economist, Mastercard Economics Institute.

“Our real-time insights show that consumers are comfortably in the gift-giving spirit as price reductions and deals occur across sectors, supporting budgets for holiday shopping.” 

The data jibes with what Adobe Analytics found. According to the tech company, online Black Friday sales rose around 10% from a year ago to $10.8 billion. 

Online Holiday Shopping Sales to Hit $241B in 2024

Adobe forecasts that Americans will spend a record $241 billion online during the 2024 holidays, up 8.4% from 2023.

Both the Mastercard and Adobe numbers suggest that online sales were strong this past Friday and will continue to be strong throughout the holiday shopping season. 

That’s good news for two ETFs focused on e-commerce—the Amplify Online Retail ETF (IBUY) and the ProShares Online Retail ETF (ONLN)—both of which rose for three straight sessions through Tuesday.  

On the other hand, the Mastercard data indicates that sales at physical stores were up just slightly, suggesting that in-store retailers don’t seem to be faring as well as their online counterparts.

The SPDR S&P Retail ETF (XRT), which holds an equal-weighted basket of retailers that derive much of their sales from physical stores, was down modestly midday on Tuesday.  

On a year-to-date basis, e-commerce-focused ETFs are outperforming funds that have broader exposure to the retail sector. IBUY and ONLN were up 28% and 30%, respectively, while XRT and the VanEck Retail ETF (RTH) were up 16% and 24%, respectively.