Try These ETF Areas in Virus-Impacted Second Half of 2020

Try These ETF Areas in Virus-Impacted Second Half of 2020

Sweta Jaiswal, FRM
5 min read

Investors continue to worry about the second wave of coronavirus infections as the total number of cases continue to surge globally. Per the Johns Hopkins University, more than 9.1 million of coronavirus cases have been reported globally. Notably, China, South Korea and Germany are trying to control the second wave of the outbreak and are taking the initiatives to re-impose some lockdown measures in areas where the emergence of new cases is being observed. Meanwhile, states like Florida, Carolinas, Texas and Arizona in the United States are seeing increasing number of hospitalizations every day.

According to the World Trade Organisation (WTO), the pandemic resulted in a 18.5% decline in global trade in the second quarter of 2020, per a CNN report. In such a scenario, if the second wave of coronavirus infections emerges, there can be a considerable impact on the global economy. Major retailers, factories, restaurants and hotels in the United States might have to shut down operations domestically and abroad, in case there is another lockdown to combat the outbreak. The reopening of U.S. states has definitely come as a ray of hope for investors.

Against this backdrop, let’s look at some ETF areas that can help you sail smoothly through this crisis:

Biotech ETFs

The race to introduce vaccine and treatment for coronavirus is opening up opportunities, making the biotech sector a prospective space for investments. From positive news related to vaccine to progress in development of cell therapies for the treatment of coronavirus, all have kept the sector surging. Notably, some ETFs with considerable exposure to the biotech space are iShares Nasdaq Biotechnology ETF IBB, SPDR S&P Biotech ETF XBI, First Trust Amex Biotechnology Index (FBT), ARK Genomic Revolution ETF (ARKG) and VanEck Vectors Biotech ETF (BBH).

Cloud Computing ETFs

In the current scenario, people will try to maintain social distancing and work remotely. Resultantly, cloud computing has emerged as 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 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.” Large employers like Twitter and Facebook have allowed their employees to work from home.

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