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Stay-At-Home ETFs to Soar Further on New Lockdown Measures

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The rise in COVID-19 infections once again has sparked concerns over the global economic recovery and unnerved investors, thus taking a toll on the broader stock market.

Coronavirus cases have been growing globally, resulting in new lockdown measures in Europe, including Spain, Denmark, and Greece. There have been talks of lockdown in London as well. More European countries are likely to impose restrictions in the coming days. Per CNBC, France reported 10,569 new cases on Sep 20 while the United Kingdom reported almost 4,000 new cases. Italy saw close to 1,000 new infections and Germany reported 1,345 new cases on Sep 20 and a further 922 cases on Sep 21.

British Prime Minister Boris Johnson will ask people to work from home and impose new curbs on pubs, bars and restaurants in a bid to tackle the accelerating second wave of the coronavirus outbreak. Top UK advisers warned that England is on track for about 50,000 coronavirus cases a day by mid-October (read: Bet on These ETFs to Gain From Coronavirus-Shaped "New Normal").

In the United States also, cases are rising with 54,875 new cases reported on Sep 21, according to New York Times data. The new case tally compares with the daily average of 41,812 over the past week.

The coronavirus-led restrictions have proved to be highly beneficial for the technology sector, which has been showing strong resilience to the pandemic and has emerged as a clear winner. This is especially true as the resurgence in infections will continue to drive the e-commerce boom. People will choose to stay indoors again, 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.

Pullback Suggests Solid Bets

The second wave of disease coupled with the tech rout in recent weeks has brought the S&P 500 on the brink of its first monthly loss since March. The benchmark is off more than 8% from its Sep 2 peak. Investors should note that the first round of lockdowns in March had caused the S&P 500 to suffer its worst monthly decline since the global financial crisis (read: 4 Safe ETF Bets as Global Stocks Tumble).  

The S&P 500 Information Technology Sector Index dropped more than 5% in a month while S&P 500 Consumer Discretionary Sector Index plunged 6%. Most of the stay-at-home stocks are from these two sectors. However, the pullback in stocks suggests good entry point for ETFs.

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

Direxion Work From Home ETF (WFH - Free Report)

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 $114.7 million in its asset base since its debut on Jun 25 and charges investors 45 bps in annual fees. It trades in average daily volume of 69,000 shares.

Roundhill Sports Betting & iGaming ETF (BETZ - Free Report)

This ETF is designed to offer retail and institutional investors exposure to sports betting and iGaming industries by tracking the Roundhill Sports Betting & iGaming Index. The fund holds 37 stocks in its basket and charges 75 bps in annual fees. It trades in an average daily volume of 186,000 shares and has amassed $124.2 million in AUM within four months (read: Sports Betting ETF Soars on Mega-Event Fervor).

WisdomTree Cloud Computing Fund (WCLD - Free Report)

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 54 stocks in its basket and charges investors 45 bps in fees per year. The product has amassed $731.9 million in its asset base and trades in average daily volume of 767,000 shares. It has a Zacks ETF Rank #2 (Buy).

O’Shares Global Internet Giants ETF (OGIG - Free Report)

The fund invests in some of the largest global companies that derive most of their revenues from the Internet and e-commerce sectors that exhibit quality and growth potential by tracking the O’Shares Global Internet Giants Index. It holds a basket of 90 stocks and charges 48 bps in annual fees. OGIG has been able to attract $394.6 million in its asset base and trades in average daily volume of 229,000 shares.

Amplify Online Retail ETF (IBUY - Free Report)

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 49 stocks in its basket and has attracted $865.8 million in its asset base. The product charges 65 bps in fees per year and trades in average daily volume of 266,000 shares.  

Direxion Connected Consumer ETF

This fund offers exposure to companies across four technology pillars — home entertainment, online education, remote health and well-being, and virtual and digital social interaction — allowing investors to capture those companies that stand to benefit from consumers connecting to products and services in new ways, especially virtual ones. It tracks the Solactive Connected Consumer Index and holds 41 stocks in its basket. The ETF charges 45 bps in annual fees and trades in average daily volume of 7,000 shares. CCON has attracted $6.4 million in its asset base within a month of debut (read: ETFs to Buy as Zoom Shares Surge 40% on Stellar Q2 Earnings).

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