Technology

Delta Variant to Spark Rally in Stay-At-Home ETFs

After declining sharply for six months, the COVID-19 infection has resurged across the United States and around the world thanks to the new Delta variant.

Per the U.S. Centers for Disease Control and Prevention (CDC) data, the Delta variant, first identified in India, is now estimated to make up 83% of all sequenced COVID-19 cases in the United States. This represents a dramatic increase from 50% for the week ended Jul 3. The United States is averaging nearly 30,000 new daily cases in the last seven days compared to last month's 11,000 seven-day average of new daily cases.

The average of new daily cases this week is up 66% from last week and 145% from two weeks ago, as cases rise in 46 U.S. states, according to data from Johns Hopkins University. In addition, hospitalizations are up 26% from last week (read: 5 ETF Zones Hitting Highs As Growth Worries Resurface).

Many health experts recently quoted on CNBC that the country is headed toward a “dangerous” fall season when Delta is expected to cause another surge in coronavirus cases. The resurgence has sparked fears of renewed shutdowns and the reintroduction of indoor mask mandates, distancing and occupancy limits in certain parts of the country, thus raising concerns over protracted economic recovery.

The coronavirus-led restrictions last year have resulted in an e-commerce boom and the new variant is expected to lead to the same trend. As such, people will again choose to stay indoors, which in turn would boost demand for cloud computing, gaming, e-sports, streaming services as well as online shopping. Additionally, investors will continue to pile up software shares, which are apparently more insulated from the impacts of the virus.

Given this, we have highlighted some ETFs from these sectors that could be excellent choices to play the trend going forward:

ARK Next Generation Internet ETF ARKW

This is an actively managed fund seeking long-term capital appreciation by investing in companies that benefit from the development of new products or services, technological improvements and advancements in scientific research. The fund holds 51 securities in its basket and charges 79 bps in annual fees. The product has gathered $5.6 billion in its asset base and trades in volume of more than 1 million shares.

WisdomTree Cloud Computing Fund WCLD

With AUM of $1.2 billion, this ETF offers exposure to emerging and fast-growing U.S.-listed companies (including ADRs) primarily focused on cloud software and services, and follows the BVP Nasdaq Emerging Cloud Index. It holds 58 stocks in its basket and charges investors 45 bps in fees per year. The product trades in an average daily volume of 326,000 shares and has a Zacks ETF Rank #3 (Hold) (read: Ride the Renewed Tech Momentum With These ETFs).

Amplify Online Retail ETF (IBUY)

This ETF offers global exposure to companies that derive 70% or more revenues from online and virtual retail by tracking the EQM Online Retail Index. It comprises 72 stocks in its basket and has attracted $1.2 billion in its asset base. The product charges 65 bps in fees per year and trades in an average daily volume of 128,000 shares.  

Roundhill Streaming Services & Technology ETF SUBZ

This ETF debuted in the space nearly six months back and has amassed $30.5 million in its asset base. It is actively managed and offers exposure to the streaming industry. The fund consists of companies from across the globe that are actively involved in the business of streaming. It holds 40 stocks in its basket and charges 75 bps in annual fees. The ETF trades in an average daily volume of 19,000 shares (read: ETFs to Tap the Blockbuster Debut of Marvel's Black Widow).

Direxion Work From Home ETF WFH

This product offers exposure to companies across four technology pillars — cloud, cybersecurity, online project and document management, and remote communications — that allow investors to gain exposure to those companies that stand to benefit from an increasingly flexible work environment. It tracks the Solactive Remote Work Index and holds 41 stocks in its basket. The fund has accumulated $118.1 million in its asset base since its debut more than a year and charges investors 45 bps in annual fees. It trades in an average daily volume of 10,000 shares and has a Zacks ETF Rank #3.

iShares Virtual Work and Life Multisector ETF IWFH

This fund provides access to companies at the forefront of virtual and remote working and living innovation. It offers exposure to global stocks along the full value chain of virtual and remote entertainment, wellness and learning industries by tracking the NYSE FactSet Global Virtual Work and Life Index. Holding 75 stocks in its basket, IWFH accumulated $8.4 million in its asset base since its inception in September 2020. It charges 47 bps in annual fees and trades in a paltry volume of 2,000 shares.


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ARK Next Generation Internet ETF (ARKW): ETF Research Reports

WisdomTree Cloud Computing ETF (WCLD): ETF Research Reports

Direxion Work From Home ETF (WFH): ETF Research Reports

iShares Virtual Work and Life Multisector ETF (IWFH): ETF Research Reports

Roundhill Streaming Services & Technology ETF (SUBZ): ETF Research Reports

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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