NEW YORK: Just in time for the Black Friday kick-off to holiday season shopping, stock market investors have been handed tools to bet on the decline of brick-and-mortar retail. As of Friday, these tools were not yet for sale on Amazon. An exchange-traded fund launched Thursday allows investors to bet on the decline of traditional retail and a second one doubles down by betting at the same time on the rise to supremacy of online sales. The Decline of Retail Stores ETF and the Long Online Short Stores ETF are self-explanatory. The main index they track inversely, the equal-weighted Solactive-ProShares Bricks and Mortar Retail Store Index, is composed of 64 retailers including Barnes & Noble, Sears, Office Depot, Macy’s and Walmart, which have chains of physical stores as well as online presence. They are not the only or the first planning for a decimation of the retail sector at the hands of Amazon and other online retailers. Research firm Bespoke introduced its Death by Amazon Index, currently with 54 components, in 2012. The trend to online shopping is not new, but with online taking only a fraction of all retail sales, the ETFs expect to capitalize on the long-term trend. “Online penetration is about 10 percent right now so there is a long way ahead for the strategy in our opinion,” said Michael Sapir, CEO of ProShare Advisors in Bethesda, Maryland. “A minority of brick and mortar (retailers) will be able to make the transition and it is going to be expensive and painful.” So far this year, the S&P 500 retail index is up 20 percent but only half of its 29 components have had a positive price return. Amazon, up over 50 percent this year at $1,129.88, has alone added $192 billion in market capitalization in 2017.
