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What to Expect From These ETF Areas Post-Pandemic?
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The year 2020 will always be remembered for the outbreak of coronavirus and the strict measures undertaken to combat the health crisis. However, 2021 is expected to be a different story considering the reopening of global economy and accelerated coronavirus vaccine rollout.
Meanwhile, certain ‘new normal’ trends emerged amid the health crisis like work-from-home and online shopping, increasing digital payments, growing video streaming as well as soaring video game popularity. Let’s discuss what’s in store for some ETF areas that thrived during the coronavirus crisis after the pandemic gets subsided:
Online Retail ETFs
Online shopping is gaining favor with shoppers in an attempt to minimize human-to-human contact as coronavirus cases continue to surge in the United States. According to the Mastercard Spending Pulse, retail sales excluding automotive and gasoline jumped 9.2% year over year in January. This growth was observed across all 50 states as the holiday season shopping momentum continued into January. The upside in January comes on the back of 3% year-over-year growth in sales during the holiday season. Notably, the pandemic has been a boon for the e-commerce industry as people continue to prefer staying indoors and shopping online.
As mentioned in a BIS Bulletin, an IBM (2020) survey of 3,450 executives in 20 countries reflected that more than three quarters project that online platform will dominate more shopping and customer service interactions during the post-pandemic period. Thus, it is expected that the e-commerce space will continue to boom.
Against this backdrop, let’s look at some of the ETFs that can benefit from this new shopping trend. These are Amplify Online Retail ETF (IBUY - Free Report) , ProShares Long Online/Short Stores ETF (CLIX - Free Report) , ProShares Online Retail ETF (ONLN - Free Report) and Global X E-Commerce ETF (EBIZ) (read: 5 ETF Winners of Coronavirus Pandemic).
Digital Payments ETFs
Along with increased interest in online shopping, customers are resorting to digital payments to clear their bills. At the same time, merchants and utility providers are increasingly advocating the same. Highlighting the growing inclination toward digital payments, Jodie Kelley, CEO of Electronic Transactions Association, has said, “Over the past six to eight months, we’ve seen the use of cash decline even further, and that’s a trend I think that we’re going to see continue,” as stated in a CNBC article.
Amid the coronavirus pandemic,industries like cloud computing have been thriving with majority of people working from home. Even though vaccine rollout has begun globally, demand for cloud computing is set to stay robust even beyond the pandemic. In the wake of the pandemic, cloud technology adoption is projected to witness robust growth in sectors where the work-from-home initiatives are helping sustain business functions. Notably, the global cloud computing market size is projected to rise from $371.4 billion in 2020 to $832.1 billion by 2025, at a CAGR of 17.5%, per a ResearchAndMarkets.com report.
Gartner has reportedly projected end-user spending on public cloud computing increase of 18.4% in 2021 globally to a total of $304.9 billion, up from an estimated $257.5 billion in 2020. Integration of cloud computing with AI, big data and IoT will help businesses touch new levels of success in innovation. Going by a Forrester’s Predictions 2021 report, cloud will power the way companies adapt to the “new, unstable normal” in 2021. The global public cloud infrastructure market is projected to expand 35% to $120 billion in 2021.
The coronavirus pandemic has lent a push to the video gaming industry as people stayed indoors and switched over to in-house entertainment sources. It also seems like the boom in the video gaming space may remain in the post-pandemic era as the outbreak has changed the lifestyle and preferences of Americans to a large extent.
It seems like there is no stopping video game players, with the health crisis forcing people to stay home. According to a report from The NPD Group, total consumer spending on video gaming in the United States continues to soar as it registered a 26% year-over-year rise to $18.6 billion in the fourth quarter of 2020. For the pandemic-stricken 2020, consumer spend across all categories within the U.S. games industry came in at $57 billion, climbing 27% from 2019. Notably, digital console and PC content, mobile and subscription spending as well as across hardware and accessories categories witnessed significant traction in 2020.
Going by a Statista report, revenues in the Video Games segment are expected to reach $154,630 million in 2021. According to the same report, revenues are expected to see a CAGR of 9.3% between 2021 and 2025, leading to a market volume of $220,549 million.
Against this backdrop, investors can take a look at the following video gaming ETFs like The Roundhill BITKRAFT Esports & Digital Entertainment ETF (NERD - Free Report) , VanEck Vectors Video Gaming and eSports ETF (ESPO - Free Report) , Global X Video Games & Esports ETF (HERO) and Wedbush ETFMG Video Game Tech ETF (GAMR) (read: 5 Global ETFs Riding on Best Winning Streak in 17 Years).
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What to Expect From These ETF Areas Post-Pandemic?
The year 2020 will always be remembered for the outbreak of coronavirus and the strict measures undertaken to combat the health crisis. However, 2021 is expected to be a different story considering the reopening of global economy and accelerated coronavirus vaccine rollout.
Meanwhile, certain ‘new normal’ trends emerged amid the health crisis like work-from-home and online shopping, increasing digital payments, growing video streaming as well as soaring video game popularity. Let’s discuss what’s in store for some ETF areas that thrived during the coronavirus crisis after the pandemic gets subsided:
Online Retail ETFs
Online shopping is gaining favor with shoppers in an attempt to minimize human-to-human contact as coronavirus cases continue to surge in the United States. According to the Mastercard Spending Pulse, retail sales excluding automotive and gasoline jumped 9.2% year over year in January. This growth was observed across all 50 states as the holiday season shopping momentum continued into January. The upside in January comes on the back of 3% year-over-year growth in sales during the holiday season. Notably, the pandemic has been a boon for the e-commerce industry as people continue to prefer staying indoors and shopping online.
As mentioned in a BIS Bulletin, an IBM (2020) survey of 3,450 executives in 20 countries reflected that more than three quarters project that online platform will dominate more shopping and customer service interactions during the post-pandemic period. Thus, it is expected that the e-commerce space will continue to boom.
Against this backdrop, let’s look at some of the ETFs that can benefit from this new shopping trend. These are Amplify Online Retail ETF (IBUY - Free Report) , ProShares Long Online/Short Stores ETF (CLIX - Free Report) , ProShares Online Retail ETF (ONLN - Free Report) and Global X E-Commerce ETF (EBIZ) (read: 5 ETF Winners of Coronavirus Pandemic).
Digital Payments ETFs
Along with increased interest in online shopping, customers are resorting to digital payments to clear their bills. At the same time, merchants and utility providers are increasingly advocating the same. Highlighting the growing inclination toward digital payments, Jodie Kelley, CEO of Electronic Transactions Association, has said, “Over the past six to eight months, we’ve seen the use of cash decline even further, and that’s a trend I think that we’re going to see continue,” as stated in a CNBC article.
In such a scenario, investors can take a look at ETFMG Prime Mobile Payments ETF (IPAY - Free Report) , Tortoise Digital Payments Infrastructure ETF and Global X FinTech ETF (FINX) (read: ETFs to Ride the Bitcoin Rally on Rising Popularity).
Cloud Computing ETFs
Amid the coronavirus pandemic,industries like cloud computing have been thriving with majority of people working from home. Even though vaccine rollout has begun globally, demand for cloud computing is set to stay robust even beyond the pandemic. In the wake of the pandemic, cloud technology adoption is projected to witness robust growth in sectors where the work-from-home initiatives are helping sustain business functions. Notably, the global cloud computing market size is projected to rise from $371.4 billion in 2020 to $832.1 billion by 2025, at a CAGR of 17.5%, per a ResearchAndMarkets.com report.
Gartner has reportedly projected end-user spending on public cloud computing increase of 18.4% in 2021 globally to a total of $304.9 billion, up from an estimated $257.5 billion in 2020. Integration of cloud computing with AI, big data and IoT will help businesses touch new levels of success in innovation. Going by a Forrester’s Predictions 2021 report, cloud will power the way companies adapt to the “new, unstable normal” in 2021. The global public cloud infrastructure market is projected to expand 35% to $120 billion in 2021.
Thus, investors can consider First Trust Cloud Computing ETF (SKYY - Free Report) , Global X Cloud Computing ETF (CLOU - Free Report) and WisdomTree Cloud Computing ETF (WCLD) (read: Can Cloud Computing ETFs Keep Soaring?).
Video Gaming ETFs
The coronavirus pandemic has lent a push to the video gaming industry as people stayed indoors and switched over to in-house entertainment sources. It also seems like the boom in the video gaming space may remain in the post-pandemic era as the outbreak has changed the lifestyle and preferences of Americans to a large extent.
It seems like there is no stopping video game players, with the health crisis forcing people to stay home. According to a report from The NPD Group, total consumer spending on video gaming in the United States continues to soar as it registered a 26% year-over-year rise to $18.6 billion in the fourth quarter of 2020. For the pandemic-stricken 2020, consumer spend across all categories within the U.S. games industry came in at $57 billion, climbing 27% from 2019. Notably, digital console and PC content, mobile and subscription spending as well as across hardware and accessories categories witnessed significant traction in 2020.
Going by a Statista report, revenues in the Video Games segment are expected to reach $154,630 million in 2021. According to the same report, revenues are expected to see a CAGR of 9.3% between 2021 and 2025, leading to a market volume of $220,549 million.
Against this backdrop, investors can take a look at the following video gaming ETFs like The Roundhill BITKRAFT Esports & Digital Entertainment ETF (NERD - Free Report) , VanEck Vectors Video Gaming and eSports ETF (ESPO - Free Report) , Global X Video Games & Esports ETF (HERO) and Wedbush ETFMG Video Game Tech ETF (GAMR) (read: 5 Global ETFs Riding on Best Winning Streak in 17 Years).
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>