Amazon.com Inc. (AMZN) has been killing it in e-commerce to the despair of countless brick-and-mortar retailers, so much so that it has prompted the debut of two new exchange-traded funds (ETFs) that bet on the demise of traditional retailers.

ProShares, the provider of ETFs, announced this week the launch of the ProShares Decline of the Retail Store ETF that it says is the first investment vehicle created to benefit specifically from the decline of physical retailers. The ETF gives investors daily short exposure to the Solactive-ProShares Bricks and Mortar Retail Store Index, which is made up of traditional retailers that are publicly traded and currently includes 56 companies that are department store operators, supermarket players, and sellers of apparel, consumer electronics, and home improvers. Some of the stocks included in the index are: Barnes & Noble (BKS), The Gap (GPS), Macy’s (M), Kroger (K) and Best Buy (BBY.) All of which have struggled under the weight of Amazon. (See more: 7 Companies Amazon Is Killing.)

“Investors are witnessing signs of trouble in the malls and falling stock prices in the markets,” said Michael L. Sapir, co-founder and CEO of ProShare Advisors in a press release announcing the new ETF. “For the first time, investors can turn these trends into a potential investment opportunity through an ETF.”

Growing Online Sales

ProShares also announced the launch of the ProShares Long Online/Short Stores ETF, which it says is the first ETF that lets investors play the growth in online companies and at the same time the decline of traditional retailers. The ETF tracks the ProShares new Long Online/Short Stories Index, which combines a 100% long portfolio of online and nontraditional retailers with a 50% short position in brick-and-mortar competitors. (See more: Amazon May Soon Become Market's 'Trillion Dollar Bull'.)

For a few years now Amazon has been having a dramatic impact on physical retailers around the world. With online shopping gaining traction and Amazon cornering the market with its low prices and free two-day delivery for Prime members, traditional retailers have been struggling to compete. According to ProShares, more than 30 retailers have declared bankruptcy during the course of the last three years with close to two-thirds happening in 2017 alone. The list from this year includes: Toys R Us, RadioShack, and Payless ShoeSource. It's also resulted in layoffs, store closings and a rethinking of the shopping experience for a slew of traditional retailers. With its multi-billion-dollar purchase of Whole Foods this summer, supermarket operators are now also in the cross hairs. ProShares noted that some analysts predict online sales will outpace brick-and-mortar retailers three to one by 2020.

 

 

 

 

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