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Here's Why COVID-Themed ETFs May Come Back Under the Radar
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COVID-themed stocks and ETFs were winners in 2020 and some parts of 2021 due to a spike in global coronavirus cases and moderate vaccinations. However, with the influx of COVID vaccinations from various companies, things started changing from late 2021. The year 2022 has, in fact, seen lifting of travel bans as number of cases started declining. Moreover, infections were less severe and fatal.
New COVID Variants are ‘Pretty Troublesome’
Against this backdrop,Dr. Fauci, the director of the National Institute of Allergy and Infectious Diseases in the United States, recently warned about a pair of “pretty troublesome” COVID variants, as quoted on CNBC. The two descendants of omicron’s BA.5 subvariant, called BQ.1 and BQ.1.1, both have dangerous “qualities or characteristics that could evade some of the interventions we have,” Fauci told CBS News on Oct 14.
The above-mentioned fact confirms that new Omicron variants are not to be ignored. Even if it proves less fatal, chances of higher infections are likely and countries’ healthcare systems may collapse again, resulting in lockdowns.
Such possibilities will likely favor the stay-at-home-friendly sector — technology. The central banks may not be of much support anymore, while massive fiscal support is also not likely now. “New normal” trends like work-and-learn-from-home and online shopping, increasing digital payments and growing video streaming may come in to the picture again, even if there is no lockdown.
Against this backdrop, below we highlight a few COVID-19-themed ETFs that could gain steam if BA.5 subvariant, called BQ.1 and BQ.1.1 become dominant globally.
The underlying Solactive Remote Work Index comprises of U.S. listed securities and ADRs of companies that provide products and services in at least one of the following business segments that facilitate the ability of people to work from home: remote communications, cyber security, online project and document management, and cloud computing technologies. The fund, which charges 45 bps in fees, has a Zacks Rank #2 (Buy).
ETFMG Treatments Testing and Advancements ETF (GERM - Free Report)
The underlying Prime Treatments, Testing and Advancements Index provides investors with a reference measure that enables them to track both event-driven news and long-term trends of companies engaged in developing treatments and vaccines, or diagnostic technology, in the fight against infectious diseases. The fund charges 68 bps in fees.
The underlying LifeSci BioThreat Strategy Index comprises of U.S. listed stocks of companies whose products or services help protect against, endure, or recover from biological threats to human health. The fund charges 70 bps in fees.
Global X Education ETF
The underlying Indxx Global Education Thematic Index tracks the performance of companies listed in developed and emerging markets that provide products and services that facilitate education, including but not limited to companies involved in online learning and educational content/publishing, as well as early childhood education, higher education and professional education. The fund charges 50 bps in fees.
Global X Telemedicine & Digital Health ETF (EDOC - Free Report)
The underlying Solactive Telemedicine & Digital Health Index seeks to provide exposure to exchange-listed companies that are positioned to benefit from further advances in the field of telemedicine and digital health. The fund charges 68 bps in fees.
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Here's Why COVID-Themed ETFs May Come Back Under the Radar
COVID-themed stocks and ETFs were winners in 2020 and some parts of 2021 due to a spike in global coronavirus cases and moderate vaccinations. However, with the influx of COVID vaccinations from various companies, things started changing from late 2021. The year 2022 has, in fact, seen lifting of travel bans as number of cases started declining. Moreover, infections were less severe and fatal.
New COVID Variants are ‘Pretty Troublesome’
Against this backdrop,Dr. Fauci, the director of the National Institute of Allergy and Infectious Diseases in the United States, recently warned about a pair of “pretty troublesome” COVID variants, as quoted on CNBC. The two descendants of omicron’s BA.5 subvariant, called BQ.1 and BQ.1.1, both have dangerous “qualities or characteristics that could evade some of the interventions we have,” Fauci told CBS News on Oct 14.
The above-mentioned fact confirms that new Omicron variants are not to be ignored. Even if it proves less fatal, chances of higher infections are likely and countries’ healthcare systems may collapse again, resulting in lockdowns.
Such possibilities will likely favor the stay-at-home-friendly sector — technology. The central banks may not be of much support anymore, while massive fiscal support is also not likely now. “New normal” trends like work-and-learn-from-home and online shopping, increasing digital payments and growing video streaming may come in to the picture again, even if there is no lockdown.
Against this backdrop, below we highlight a few COVID-19-themed ETFs that could gain steam if BA.5 subvariant, called BQ.1 and BQ.1.1 become dominant globally.
Direxion Work From Home ETF (WFH - Free Report)
The underlying Solactive Remote Work Index comprises of U.S. listed securities and ADRs of companies that provide products and services in at least one of the following business segments that facilitate the ability of people to work from home: remote communications, cyber security, online project and document management, and cloud computing technologies. The fund, which charges 45 bps in fees, has a Zacks Rank #2 (Buy).
ETFMG Treatments Testing and Advancements ETF (GERM - Free Report)
The underlying Prime Treatments, Testing and Advancements Index provides investors with a reference measure that enables them to track both event-driven news and long-term trends of companies engaged in developing treatments and vaccines, or diagnostic technology, in the fight against infectious diseases. The fund charges 68 bps in fees.
Pacer Biothreat Strategy ETF (VIRS - Free Report)
The underlying LifeSci BioThreat Strategy Index comprises of U.S. listed stocks of companies whose products or services help protect against, endure, or recover from biological threats to human health. The fund charges 70 bps in fees.
Global X Education ETF
The underlying Indxx Global Education Thematic Index tracks the performance of companies listed in developed and emerging markets that provide products and services that facilitate education, including but not limited to companies involved in online learning and educational content/publishing, as well as early childhood education, higher education and professional education. The fund charges 50 bps in fees.
Global X Telemedicine & Digital Health ETF (EDOC - Free Report)
The underlying Solactive Telemedicine & Digital Health Index seeks to provide exposure to exchange-listed companies that are positioned to benefit from further advances in the field of telemedicine and digital health. The fund charges 68 bps in fees.