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

0:00:04.040 --> 0:00:08.360
<v Speaker 1>Broadcasting live to New York, Bloomberg eleven Rio to Washington,

0:00:08.440 --> 0:00:13.480
<v Speaker 1>d C. Bloomberg to Boston, Bloomberg twelve hundred to San Francisco,

0:00:13.600 --> 0:00:18.600
<v Speaker 1>Bloomberg to the country, US exam General one, and around

0:00:18.640 --> 0:00:22.320
<v Speaker 1>the globe the Bloomberg Radio, Plowstappen, Bloomberg dot Com. This

0:00:22.920 --> 0:00:27.440
<v Speaker 1>is taking Stock. I'm Kathleen Hayes along with PM Fox

0:00:27.600 --> 0:00:31.000
<v Speaker 1>on the road again, broadcasting live from the Kmton Morrison

0:00:31.080 --> 0:00:35.319
<v Speaker 1>House Hotel in Alexandria, Virginia, the Washington metro area home

0:00:35.360 --> 0:00:39.280
<v Speaker 1>of Bloomberg One. Taking a look now, pim at retail.

0:00:39.360 --> 0:00:41.199
<v Speaker 1>You know what, no matter where you are, you can

0:00:41.240 --> 0:00:43.040
<v Speaker 1>go online and buy stuff. I wonder what it means

0:00:43.080 --> 0:00:46.040
<v Speaker 1>for brick and mortar people here in Alexandria. Yes, well,

0:00:46.120 --> 0:00:47.559
<v Speaker 1>and we know what it means for a lot of

0:00:47.600 --> 0:00:51.200
<v Speaker 1>retailers such as Macy's as well as Nordstrom's after learning

0:00:51.240 --> 0:00:54.560
<v Speaker 1>about their quarterly results that we'll be speaking with Christian Magoon.

0:00:54.680 --> 0:00:57.960
<v Speaker 1>He's the chief executive and the founder of Amplify Investments,

0:00:58.520 --> 0:01:02.840
<v Speaker 1>about a new et. Fit's got online retail All right,

0:01:02.880 --> 0:01:04.840
<v Speaker 1>right now, let's got Charlie Pelletan the Bloomberg News and

0:01:04.920 --> 0:01:07.399
<v Speaker 1>for Bloomberg Business FLA and I thank you Tim, Thank

0:01:07.440 --> 0:01:09.760
<v Speaker 1>you Kathleen. Stocks aren't trading at the worst level of

0:01:09.760 --> 0:01:12.840
<v Speaker 1>the day. This update brought to you by Pershing's Insight

0:01:13.600 --> 0:01:17.800
<v Speaker 1>sixteen conference, a must attend for advisers June seventh through

0:01:17.800 --> 0:01:22.720
<v Speaker 1>the ninth in Orlando, Florida. Register at Insight dot com.

0:01:22.800 --> 0:01:26.720
<v Speaker 1>That is I N S, I T E twenty six

0:01:27.360 --> 0:01:30.920
<v Speaker 1>dot com. Two regional Fed bank presidents say at least

0:01:30.959 --> 0:01:34.360
<v Speaker 1>two interest rate increases may be warranted this year because

0:01:34.400 --> 0:01:38.119
<v Speaker 1>the economy continues to expand and inflation is picking up,

0:01:38.480 --> 0:01:42.480
<v Speaker 1>pushing back against expectations the Central Bank will delay action

0:01:42.600 --> 0:01:46.040
<v Speaker 1>next month. Federal Reserve Bank of Atlanta President Dennis Lockhart

0:01:46.080 --> 0:01:49.600
<v Speaker 1>says his assumption is to possibly three moves this year.

0:01:49.880 --> 0:01:52.520
<v Speaker 1>He was joined at the Politico hosted event by San

0:01:52.560 --> 0:01:56.280
<v Speaker 1>Francisco Fed colleague John Williams, who said, quote gradual means

0:01:56.360 --> 0:02:00.200
<v Speaker 1>two to three rate increases this year. Torsten sloss Block

0:02:00.360 --> 0:02:03.480
<v Speaker 1>is chief international economist at Deutsche Bank. He was interviewed

0:02:03.560 --> 0:02:06.520
<v Speaker 1>this morning on Bloomberg Television. One very important driver of

0:02:06.640 --> 0:02:09.120
<v Speaker 1>rates is the economy. So if inflation goes up, rates

0:02:09.120 --> 0:02:11.480
<v Speaker 1>go Upflasing go down as rates go down, but in

0:02:11.520 --> 0:02:14.240
<v Speaker 1>this globalized world, with fifty percent of treasuries held by

0:02:14.280 --> 0:02:18.000
<v Speaker 1>foreigners and fifty percent held domistically, those foreigners are actually

0:02:18.000 --> 0:02:20.919
<v Speaker 1>really important. So that's why both private foreigners and central

0:02:20.960 --> 0:02:24.160
<v Speaker 1>banks have brought a very important drivers. And the supply

0:02:24.600 --> 0:02:28.119
<v Speaker 1>in the US off treasuries has actually been declining quite

0:02:28.120 --> 0:02:30.440
<v Speaker 1>substantially over the last sevil year. Right now, we've got

0:02:30.480 --> 0:02:32.720
<v Speaker 1>the down down two hundred and four points, a drop

0:02:32.760 --> 0:02:35.760
<v Speaker 1>of one p SMP down twenty two, a drop of

0:02:36.080 --> 0:02:39.160
<v Speaker 1>one point one percent, gold up four tenths of one

0:02:39.200 --> 0:02:45.560
<v Speaker 1>percent to twelve seventy eight. Right now it is twelve two. Charlie,

0:02:45.560 --> 0:02:48.000
<v Speaker 1>thank you from the Bloomberg news room. On Mark Crumpton,

0:02:48.280 --> 0:02:51.080
<v Speaker 1>how Speaker Paul Ryan is reacting to a new poll

0:02:51.320 --> 0:02:54.560
<v Speaker 1>that shows more Republican voters trust Donald Trump to lead

0:02:54.560 --> 0:02:57.280
<v Speaker 1>the GOP than the speaker room. So he's wrapping up

0:02:57.320 --> 0:02:59.560
<v Speaker 1>the nomination. Good Lord, I hope it is because the

0:02:59.560 --> 0:03:01.840
<v Speaker 1>person who is getting the nomination of our party is

0:03:01.880 --> 0:03:04.079
<v Speaker 1>the person to lead our party. The chairman of the

0:03:04.200 --> 0:03:08.639
<v Speaker 1>National Transportation Safety Board testified today about last year's deadly

0:03:08.720 --> 0:03:13.080
<v Speaker 1>Amtrak crash in Philadelphia. Christopher Heart says speed controls on

0:03:13.120 --> 0:03:15.880
<v Speaker 1>the tracks would have provided a safety night. If a

0:03:15.880 --> 0:03:18.440
<v Speaker 1>PTC system had been active there, this train would not

0:03:18.480 --> 0:03:21.320
<v Speaker 1>have derailed on the curve. Close to two hundred passengers

0:03:21.400 --> 0:03:24.160
<v Speaker 1>would not have been injured, and eight other passengers would

0:03:24.160 --> 0:03:27.440
<v Speaker 1>still be alive. Today, the crash killed a people. The

0:03:27.560 --> 0:03:31.600
<v Speaker 1>debate about funding the US fight against Zekea continues. House

0:03:31.639 --> 0:03:35.560
<v Speaker 1>Republicans have proposed spending about six twenty two million dollars

0:03:35.760 --> 0:03:38.560
<v Speaker 1>to fight the spread of zeka in the US. It's

0:03:38.600 --> 0:03:40.880
<v Speaker 1>only about a third of the one point nine billion

0:03:40.920 --> 0:03:44.720
<v Speaker 1>dollars requested by President Obama. The House version would be

0:03:44.760 --> 0:03:49.560
<v Speaker 1>financed by cutts to unspent funding passed to battle a

0:03:49.680 --> 0:03:53.600
<v Speaker 1>bowl up. Florida Congresswoman Debbie Wasserman Schultz is calling on

0:03:53.720 --> 0:03:56.760
<v Speaker 1>Congress to approve President Obama's proposal. This is such an

0:03:56.840 --> 0:04:01.160
<v Speaker 1>urgent issue that Governor Scott, Senator Rubio, President Obbama, and

0:04:01.200 --> 0:04:04.160
<v Speaker 1>myself agree agree on it. The House could vote on

0:04:04.200 --> 0:04:07.800
<v Speaker 1>their funding measure this week. Michael Barr Bloomberg Radio of

0:04:07.840 --> 0:04:10.480
<v Speaker 1>Federal Appeals Court is delaying the release of a list

0:04:10.520 --> 0:04:14.600
<v Speaker 1>of co conspirators in the thirteen George Washington Bridge Lane

0:04:14.600 --> 0:04:17.880
<v Speaker 1>closing scandal. The ruling calls for a June sixth hearing

0:04:18.080 --> 0:04:21.400
<v Speaker 1>to decide whether to release the list. Global news twenty

0:04:21.400 --> 0:04:24.480
<v Speaker 1>four hours a day, powered by our two hundred journalists

0:04:24.480 --> 0:04:26.920
<v Speaker 1>and more than one hundred fifty news bureaus around the

0:04:26.960 --> 0:04:30.200
<v Speaker 1>world from the Bloomberg News Room by Mark Crumpton, Charlie

0:04:30.560 --> 0:04:32.760
<v Speaker 1>and we thank you. And at two thirty four on

0:04:32.800 --> 0:04:35.440
<v Speaker 1>the East coast, still thirty four on the West coast,

0:04:35.480 --> 0:04:38.640
<v Speaker 1>we are brought to you by s E I imagine

0:04:38.680 --> 0:04:42.880
<v Speaker 1>your asset management firms operational infrastructure as a competitive advantage.

0:04:42.920 --> 0:04:45.640
<v Speaker 1>Let see I show you how at se i C

0:04:45.880 --> 0:04:49.120
<v Speaker 1>dot com slash imagine again the dowdown two oh nine,

0:04:49.560 --> 0:04:52.880
<v Speaker 1>SMP down twenty three. That is a drop of one percent.

0:04:53.320 --> 0:04:57.640
<v Speaker 1>I'm Charlie Palette. That's a Bloomberg Business flash bus. He's

0:04:57.720 --> 0:05:01.640
<v Speaker 1>taking stoff with Kathleen Hayes and Pim Box on Bloomberg Radio,

0:05:02.520 --> 0:05:05.120
<v Speaker 1>continuing our line broadcast here at the Kenton Morrison House

0:05:05.120 --> 0:05:08.760
<v Speaker 1>Hotel in Alexandria, Virginia. We're in the Washington metro area

0:05:08.720 --> 0:05:12.680
<v Speaker 1>of the nation's capital, home of Bloomberg one. No matter

0:05:12.720 --> 0:05:15.640
<v Speaker 1>where you are, retail is certainly a big question right

0:05:15.640 --> 0:05:18.760
<v Speaker 1>now for investors and for the markets. Some news out

0:05:18.760 --> 0:05:22.159
<v Speaker 1>on e commerce sales. They were up eleven year over

0:05:22.279 --> 0:05:25.000
<v Speaker 1>year last month. Sounds good and it is, except it's

0:05:25.000 --> 0:05:27.719
<v Speaker 1>the lowest rate of recorded so far this year. Following

0:05:27.760 --> 0:05:31.000
<v Speaker 1>a tough month broadly for retails retailers, which we saw

0:05:31.040 --> 0:05:33.640
<v Speaker 1>in the government's retail sales last week. We're gonna put

0:05:33.680 --> 0:05:36.800
<v Speaker 1>a focus now on e commerce as we introduced our

0:05:36.839 --> 0:05:41.240
<v Speaker 1>next guest, Christian Magoon. He's CEO of Amplify Investments. He's

0:05:41.279 --> 0:05:43.800
<v Speaker 1>got a new e t F and he's got a

0:05:43.839 --> 0:05:46.880
<v Speaker 1>lot to tell us about what's going on with online commerce.

0:05:46.920 --> 0:05:50.680
<v Speaker 1>Welcome to the show, Christian, Thanks appreciate you. So how

0:05:50.720 --> 0:05:53.840
<v Speaker 1>did you? First of all, let's talk about e commerce

0:05:54.040 --> 0:05:58.600
<v Speaker 1>and uh, your new e t F. It's it's unique

0:05:58.600 --> 0:06:01.400
<v Speaker 1>and it gives people a chance to invest in e

0:06:01.560 --> 0:06:03.560
<v Speaker 1>commerce plays, which you can't do with a lot of

0:06:03.600 --> 0:06:06.800
<v Speaker 1>retail sales e t f s. That's right. We saw

0:06:06.839 --> 0:06:10.800
<v Speaker 1>an opportunity. Online sales are growing at a pretty a

0:06:10.839 --> 0:06:13.719
<v Speaker 1>significant rate in the U s and and globally, and

0:06:13.760 --> 0:06:16.039
<v Speaker 1>there wasn't an e t F that really focused on

0:06:16.120 --> 0:06:19.000
<v Speaker 1>companies that had a majority of their revenue coming from

0:06:19.080 --> 0:06:22.039
<v Speaker 1>online retail sales. So we launched I Buy to take

0:06:22.040 --> 0:06:25.120
<v Speaker 1>advantage of that. A company has to have sevent or

0:06:25.160 --> 0:06:28.159
<v Speaker 1>more of their revenue from online retail sales to be

0:06:28.279 --> 0:06:30.240
<v Speaker 1>in the index and thus in the e t F.

0:06:31.200 --> 0:06:33.479
<v Speaker 1>Give us a little bit of your own history, because

0:06:33.520 --> 0:06:39.960
<v Speaker 1>you have been an expert and a industry creator in

0:06:40.400 --> 0:06:44.880
<v Speaker 1>exchange traded funds. Christian. Yeah, thanks, Pim. I've been doing, uh,

0:06:45.320 --> 0:06:48.680
<v Speaker 1>been launching et F since two thousand five. I've launched

0:06:48.680 --> 0:06:50.480
<v Speaker 1>over six the e t F in the United States,

0:06:50.520 --> 0:06:53.680
<v Speaker 1>many of them first to market products, first solar et F,

0:06:53.800 --> 0:06:56.440
<v Speaker 1>the first brick ETF. Uh. This is kind of in

0:06:56.520 --> 0:07:00.320
<v Speaker 1>that same line, launching the first online retail ETF, trying

0:07:00.320 --> 0:07:03.880
<v Speaker 1>to access a unique market segment that's complementary to the

0:07:03.880 --> 0:07:06.680
<v Speaker 1>existing e t F selection that is out there. So

0:07:06.880 --> 0:07:08.880
<v Speaker 1>I'm not all about I'm launching e t s for

0:07:08.960 --> 0:07:12.560
<v Speaker 1>et F sake. We have to provide new market segments

0:07:12.560 --> 0:07:15.200
<v Speaker 1>and exposure, and that's what I Buy did in our opinion.

0:07:15.920 --> 0:07:20.760
<v Speaker 1>So e commerce is has certainly grown rapidly, uh, And

0:07:20.920 --> 0:07:24.560
<v Speaker 1>it's happening in environment where the traditional brick and mortar

0:07:24.800 --> 0:07:29.720
<v Speaker 1>retail part of this was already very overstored, right, and

0:07:29.920 --> 0:07:32.040
<v Speaker 1>people are already kind of wondering where we're kind of

0:07:32.040 --> 0:07:33.560
<v Speaker 1>fall up there would be we're seeing a lot of

0:07:33.560 --> 0:07:37.240
<v Speaker 1>retail bankruptcies this year. How do you how do you

0:07:37.320 --> 0:07:40.120
<v Speaker 1>measure e commerce and what do you look for when

0:07:40.160 --> 0:07:42.320
<v Speaker 1>you go to put a company in one of your

0:07:42.560 --> 0:07:44.200
<v Speaker 1>e t s. But this one in particular, your I

0:07:44.360 --> 0:07:47.360
<v Speaker 1>buy Yes, so UM I buy as an index based

0:07:47.440 --> 0:07:50.560
<v Speaker 1>e t F. It seeks to track before fees and expenses,

0:07:50.560 --> 0:07:53.960
<v Speaker 1>the e q M Online Retail Index. So the index

0:07:54.000 --> 0:07:57.000
<v Speaker 1>provider actually has to go into all the retail companies

0:07:57.040 --> 0:08:00.800
<v Speaker 1>really globally that meet a minimum market cap and trading

0:08:00.880 --> 0:08:03.400
<v Speaker 1>volume history and then go into their balance sheets and

0:08:03.440 --> 0:08:07.960
<v Speaker 1>determine the percentage of revenue they receive from online retail sales.

0:08:08.400 --> 0:08:11.080
<v Speaker 1>And the benchmark that they've created is a company must

0:08:11.080 --> 0:08:14.400
<v Speaker 1>have seventy or more of their sales coming from online

0:08:14.640 --> 0:08:17.680
<v Speaker 1>retail to be me and the index. So that involves

0:08:17.680 --> 0:08:21.280
<v Speaker 1>a fair amount of going into company financials. It's not

0:08:21.320 --> 0:08:24.160
<v Speaker 1>like we're just buying the fifty largest market cap companies

0:08:24.400 --> 0:08:26.480
<v Speaker 1>in that space UM and we feel like that's an

0:08:26.520 --> 0:08:29.880
<v Speaker 1>item of value to investors. What's interesting is you see

0:08:29.880 --> 0:08:34.360
<v Speaker 1>about forty three companies actually qualified globally UM, majority of

0:08:34.360 --> 0:08:39.160
<v Speaker 1>them in the US UM Under those criteria. Christian, let

0:08:39.160 --> 0:08:41.360
<v Speaker 1>me just throw a couple of names at you just

0:08:41.600 --> 0:08:44.120
<v Speaker 1>maybe you can expand on the concept so that we

0:08:44.240 --> 0:08:48.680
<v Speaker 1>understand the strategies that are so diverse in the online

0:08:48.679 --> 0:08:53.360
<v Speaker 1>retailer and retail space uh EPs, blue Nile, over Stock,

0:08:53.480 --> 0:08:59.000
<v Speaker 1>dot Com, grub Hub, uh H s N, price Line,

0:08:59.360 --> 0:09:04.600
<v Speaker 1>shutter Flow, eBay, Expedia, Netflix, tell us about how they

0:09:04.640 --> 0:09:08.800
<v Speaker 1>all come together Amazon. Right, So there's really three types

0:09:08.840 --> 0:09:11.440
<v Speaker 1>of companies in the e t F PIM. The largest

0:09:11.520 --> 0:09:15.080
<v Speaker 1>allocation is traditional retailers. It's about six of the e

0:09:15.200 --> 0:09:18.520
<v Speaker 1>t F and these are companies like pet meds, UM,

0:09:18.600 --> 0:09:21.880
<v Speaker 1>companies like lands and that are doing again seventy or

0:09:21.920 --> 0:09:25.080
<v Speaker 1>more of their sales from through an online channel. The

0:09:25.120 --> 0:09:29.840
<v Speaker 1>second largest waiting is UM online marketplace companies, and these

0:09:29.840 --> 0:09:32.080
<v Speaker 1>are companies that really create a place for you to

0:09:32.080 --> 0:09:34.800
<v Speaker 1>buy and sales, so think of eBay, think of etc.

0:09:35.040 --> 0:09:39.800
<v Speaker 1>For example. And then the final area is online travel. Expedia,

0:09:39.920 --> 0:09:44.280
<v Speaker 1>trip Advisor are are great examples. Priceline again, UM companies

0:09:44.280 --> 0:09:48.000
<v Speaker 1>that are providing travel services UM in UM receiving the

0:09:48.040 --> 0:09:50.520
<v Speaker 1>majority of their sales from online. So you get a

0:09:50.559 --> 0:09:53.680
<v Speaker 1>diverse group of companies UH in these three different market

0:09:53.720 --> 0:09:58.920
<v Speaker 1>segments and then about seventy US exposure outside the US.

0:09:59.640 --> 0:10:03.880
<v Speaker 1>So what is your bet on online retail? Has it? Uh?

0:10:04.160 --> 0:10:06.520
<v Speaker 1>Is it starting to plateau? I mean I still buy

0:10:06.640 --> 0:10:10.240
<v Speaker 1>most everything in stores. I may never change much my

0:10:10.320 --> 0:10:12.959
<v Speaker 1>daughter buys more online? Uh? Or or do you think

0:10:12.960 --> 0:10:15.319
<v Speaker 1>this continues to grow? This play out? Yeah, that's a

0:10:15.360 --> 0:10:18.280
<v Speaker 1>great question, Kathleen. Currently, even though a lot of people

0:10:18.320 --> 0:10:21.240
<v Speaker 1>are familiar with online retail sales, it's only seven and

0:10:21.240 --> 0:10:24.240
<v Speaker 1>a half percent of US total total US retail sales.

0:10:24.280 --> 0:10:26.680
<v Speaker 1>So we think they're um this, This has room to

0:10:26.720 --> 0:10:29.120
<v Speaker 1>maybe double or triple over the next four or five years,

0:10:29.120 --> 0:10:31.520
<v Speaker 1>and we've seen research that supports that. So I think

0:10:31.520 --> 0:10:35.600
<v Speaker 1>it continues to grow dramatically. Christian, will you come back

0:10:35.640 --> 0:10:37.640
<v Speaker 1>and spend time with us some time in the future,

0:10:37.679 --> 0:10:40.000
<v Speaker 1>because I'd love to talk to you about social media

0:10:40.080 --> 0:10:44.520
<v Speaker 1>and what you're doing there were you absolutely him? Christian Magoon.

0:10:44.600 --> 0:10:48.920
<v Speaker 1>He's the chief executive founder Amplify in Investments, UH, Colorado

0:10:49.040 --> 0:10:53.800
<v Speaker 1>springs at Colorado. His Twitter handle at Christian Magoon. You're

0:10:53.840 --> 0:11:02.320
<v Speaker 1>listening to taking Stock on Bluebirg Radio Bloomberg. Taking Stock

0:11:02.440 --> 0:11:04.360
<v Speaker 1>is brought to you by a celebrity motorcar company, the

0:11:04.440 --> 0:11:07.760
<v Speaker 1>luxury of BMW, the performance of Maserati, the innovation of Lexus.

0:11:07.760 --> 0:11:09.880
<v Speaker 1>Walk the red carpet and get the status you deserve

0:11:09.920 --> 0:11:15.199
<v Speaker 1>at the Celebrity Motorcar Company. Visit Celebrity motorcar dot com