Fearing 2nd Wave of Coronavirus? Bet on Stay-at-Home ETFs

Fearing 2nd Wave of Coronavirus? Bet on Stay-at-Home ETFs

Globally, the fears of a resurgence of coronavirus are spooking investors. In fact, China and Germany have taken the initiative to reimpose some lockdown measures in areas where the emergence of new cases are being observed. Meanwhile, states like Florida, Carolinas, Texas and Arizona are seeing increasing number of hospitalizations every day and are apprehending widespread community transmission (per a CNN report). Also, the new model suggests that Florida has “all the markings of the next large epicenter" of the coronavirus outbreak, per a CNN report. The fears worsened when the United States reported more than 25,500 new coronavirus cases and a death toll of around 755 on Jun 17.

The effect of the concerns over rising coronavirus cases was visible on the Wall Street, where Dow Jones Industrials Average index lost 0.7% and the S&P 500 declined 0.4%. However, it was also observed that stocks like Amazon, Netflix and Google-parent Alphabet that mostly rallied during the pandemic-induced lockdowns, actually gained in yesterday’s trading session. Meanwhile, stocks like United Airlines and Nordstrom that surged following the reopening of the economy lost ground in yesterday’s trading session.

In such a scenario, let’s look at some ETF areas that can gain as people will try to minimize human-to-human contact:

Work-From-Home Trend

In the current scenario, people will try to maintain social distancing and work remotely. Resultantly, cloud computing is a key technology in the fight against coronavirus. It is supporting organizations in remotely processing a lot of information, developing and running key applications and services, and also helping employees across the world collaborate while working.

Kate Lister’s, president of Global Workplace Analytics, take on the current situation highlights the growing preference for working from home. In this regard, she said that, “seventy-seven percent of the workforce say they want to continue to work from home, at least weekly, when the pandemic is over. Twenty-five to thirty percent of the workforce will be working-from-home multiple days a week by the end of 2021,” per a Forbes article. Large employers like Twitter and Facebook have allowed their employees to work from home.

Against this backdrop, investors can look at the following ETFs that can gain from the trend -- First Trust Cloud Computing ETF SKYY and Global X Cloud Computing ETF CLOU (read: What Awaits Cloud ETFs As Zoom's Fame Begins to Fade?).