WEBVTT - Magoon on Opportunities in Retail Sector (Audio)

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<v Speaker 1>He is taking stock with Kathleen Hayes and Pim Fox

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<v Speaker 1>on Bloomberg Radio. Investing in retail it might not involve

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<v Speaker 1>investing in companies such as Macy's or Nordstrom. It may

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<v Speaker 1>involve retail me not Etsy, grub Hub and eBay. Here

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<v Speaker 1>to tell us more, Christian Magoon. He is the chief

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<v Speaker 1>executive officer and the founder of Amplify Investments. He joins

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<v Speaker 1>us from Wheaton, Illinois. Christian, thanks very much for being

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<v Speaker 1>with me. Great to be back, Pim, thank you for

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<v Speaker 1>having me. Tell tell us a little bit about the

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<v Speaker 1>Amplify I Buy I b U y E t F

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<v Speaker 1>and how it differs from a more traditional E t

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<v Speaker 1>F that focuses on retail, such as the x RT

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<v Speaker 1>that's the SMP retail E t F. Yeah. Absolutely, And

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<v Speaker 1>you know we've seen in the headlines that traditional retailers

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<v Speaker 1>are really feeling the pain, whether we're talking about Macy's

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<v Speaker 1>or Target to recent examples, UM consumers are changing their

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<v Speaker 1>preferences and they're going less and less to brick and

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<v Speaker 1>mortar stores and more and more on to online stores.

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<v Speaker 1>And our online retail et F ticker I buy uh

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<v Speaker 1>focuses on companies retailers that have se or more of

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<v Speaker 1>their revenue coming from online sales, and this is the

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<v Speaker 1>area that's growing in retail. Retail is kind of a

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<v Speaker 1>hated sector, but that's because most people think of these

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<v Speaker 1>traditional brick and mortar companies. UH. What's actually doing very

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<v Speaker 1>well or quite well in the retail space and having

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<v Speaker 1>positive performance are online retailers. And that's really where this

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<v Speaker 1>ETS sets itself apart. It's about eight different in terms

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<v Speaker 1>of its portfolio makeup than a traditional retail if E

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<v Speaker 1>t F for example. So we really think that the

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<v Speaker 1>opportunity going forward and even today is in online retail

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<v Speaker 1>companies and UH, this ETF offers a one stop way

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<v Speaker 1>of accessing UH companies around the world that have that

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<v Speaker 1>revenue source. Christian, are you using the term retail in

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<v Speaker 1>its broadest sense? Because the largest holding, for example, UH

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<v Speaker 1>in recent filing is retail me not, followed by Etsy

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<v Speaker 1>and then grub hub, which is online food ordering site

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<v Speaker 1>eBay which offers not their own products but products from

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<v Speaker 1>third party vendors. So is retail now just a completely

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<v Speaker 1>different UH description because you've got Netflix in there as well. Yes,

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<v Speaker 1>So we categorize online retail into the really three areas

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<v Speaker 1>Traditional retailers UM so companies like a Blue Nile or

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<v Speaker 1>lands In or an overstock or a Wayfair UH companies

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<v Speaker 1>that are selling traditional goods and services via online channels

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<v Speaker 1>and that have sevent or more of their revenue from

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<v Speaker 1>online sales. So that's the largest percentage of the funds

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<v Speaker 1>waiting about fift as a end of June. And then

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<v Speaker 1>the two other areas are marketplace companies within retail. So

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<v Speaker 1>when you think of marketplace, you think of grub Hub,

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<v Speaker 1>ets Ali Baba, Mercado Libre. And then the other last

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<v Speaker 1>area is h the smallest portion of the portfolio travel companies,

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<v Speaker 1>so the price lines of the world trip Advisor. It

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<v Speaker 1>really it's where are people doing their kind of buying

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<v Speaker 1>and selling in the retail space. And we've roddened it out,

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<v Speaker 1>so to speak, to include some of these UM sub

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<v Speaker 1>sectors within retail UM that are really focused on driving

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<v Speaker 1>sales and revenue through the online model. The online model

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<v Speaker 1>just seems to offer better pricing, more selection and convenience,

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<v Speaker 1>and it seems to be trumping kind of traditional bricket

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<v Speaker 1>mortar retail both in terms of consumer preference, in terms

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<v Speaker 1>of its growth, but also in terms of the stock

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<v Speaker 1>performance of these uh kind of unique businesses. Well, just

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<v Speaker 1>to give the return so far in the month, up

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<v Speaker 1>seven percent, the three month return up a little bit more,

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<v Speaker 1>up a little bit more than fifteen per cent. When

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<v Speaker 1>did this start trading? Yes, in April April, the Amplify

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<v Speaker 1>Online Retail et F ticker i by launched on the

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<v Speaker 1>NASDAC as an exchange traded fund. It's an index based

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<v Speaker 1>exchange traded fund, and um, you know it's it's had

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<v Speaker 1>some significant performance. It's gained a little bit more than

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<v Speaker 1>eight percent since it's launched. That compares to, for example,

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<v Speaker 1>the largest traditional retail et S in the marketplace, the

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<v Speaker 1>Spider Retail et F ticker x RT, which during that

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<v Speaker 1>same time period is gained about eighty one basis points,

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<v Speaker 1>or about one per cent. So there's about a hundred

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<v Speaker 1>or eight hundred basis points out performance we're seeing from

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<v Speaker 1>these online retail companies and we really think it's the

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<v Speaker 1>hidden gem in this unloved sector of retail. Now, you

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<v Speaker 1>also in your past, I think it was in two

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<v Speaker 1>thousand six, you start Claymore e t s correct, which

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<v Speaker 1>was then sold to Guggenheim. That's right, So yeah, I

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<v Speaker 1>started the e t F product line at Claymore, which

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<v Speaker 1>is now owned by Guggenheim Investments, and launched about six

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<v Speaker 1>d e t s, many of them first to market

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<v Speaker 1>that we've talked about over time, and you know, we

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<v Speaker 1>were We've been involved in the first cybersecurity e t

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<v Speaker 1>F that launched several years ago, the first solar et FU.

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<v Speaker 1>Variety of different kind of first to markets and that's

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<v Speaker 1>really our our our mission here and amplifies to christ

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<v Speaker 1>I just gotta I just gotta jump in because you

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<v Speaker 1>don't have a lot of time. I just want your

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<v Speaker 1>quick thoughts here. Isn't it also a big challenge for

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<v Speaker 1>you to get some volume on this e t F.

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<v Speaker 1>I mean you're trading like a thousand shares it volume

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<v Speaker 1>on platforms. That's the biggest challenge. Isn't it give you

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<v Speaker 1>that tense right especially during summer that the volume is

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<v Speaker 1>is a tough thing. But we think the performance will

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<v Speaker 1>start to attract that volume. Uh and Uh, we're really

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<v Speaker 1>excited about what the fall is gonna lead to because

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<v Speaker 1>it's great season for retail and we think online retail

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<v Speaker 1>will have an accelerated fall as well. We've got to

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<v Speaker 1>leave it there thanks very much. Christian Magoon he is

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<v Speaker 1>the chief executive and the founder of Amplify Investments. They're

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<v Speaker 1>based in Wheaton, Illinois. This is Bloomberg.