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ETFs Set to Benefit from Social Distancing, Stay-At-Home

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The coronavirus crisis is showing no signs of slowdown, resulting in continued lockdowns, social distancing and stay-at-home mandates to contain the spread. It has forced people to work and look for entertainment at home only, raising the demand for cloud computing, gaming and e-sports, as well as streaming services (read: 6 Industries & Their ETFs to Protect You from Virus in Q2).

Cloud Computing

Cloud computing providers like Amazon.com Inc (AMZN - Free Report) , Microsoft Corp (MSFT - Free Report) , and Alphabet (GOOGL - Free Report) have emerged as corporate winners amid the pandemic as their services help people remain connected with work and families.  

In particular, Microsoft saw a whooping 775% increase in use of its cloud services in areas with social distancing or shelter in place orders. Meanwhile, new data showed that digital tools like Zoom Video Communications’ teleconferencing software has seen spike in usage. Daily active user count increased 378% from a year earlier as of Mar 22, while monthly active users were up 186%, according to data from Apptopia (read: 3 ETFs to Profit from Explosive Growth of Cloud Computing).

Additionally, the number of people using video-conferencing app Zoom (ZM) has ballooned in March. At the end of December last year, the maximum number of daily meetings conducted on Zoom was approximately 10 million, according to the company. The number rose to more than 200 million daily users in March this year.

Global X Cloud Computing ETF CLOU, First Trust ISE Cloud Computing Index Fund SKYY and WisdomTree Cloud Computing Fund WCLD could be an exciting play in this area. These funds are down 9.9%, 8.1% and 10.8%, respectively, over the past month.

Gaming: A Hot Hub

Gaming providers like Activision Blizzard (ATVI - Free Report) , Electronic Arts (EA - Free Report) and Take-Two Interactive (TTWO - Free Report) are set to benefit from surge in video game interest during this period of home isolation. Per Verizon, U.S. video game usage during peak hours has jumped 75%. Some of the most popular games include Fortnite: Battle Royale, Call of Duty: Warzone, Counter-Strike: Global Offensive, DOTA 2, Rainbow Six: Siege, Grand Theft Auto V, Animal Crossing: New Horizons and Half-Life: Alyx. Notably, Call of Duty: Warzone grew to 30 million players in just nine days following its Mar 10 release. The lockdown in China also drove a gaming surge for top Asian gaming companies like Tencent (TCEHY - Free Report) and NetEase (NTES - Free Report) .

With traditional sport events canceled due to the coronavirus crisis, professional gaming leagues for Call of Duty, CS:GO, League of Legends, and Overwatch are all moving online.

The rise in video gaming usage and online shifting of sport events has made VanEck Vectors Video Gaming and eSports ETF ESPO, ETFMG Video Game Tech ETF (GAMR - Free Report) and Global X Video Games & Esports ETF (HERO - Free Report) popular. The trio has lost 2%, 11.5% and 3%, respectively in a month (read: ETFs to Ride on Rising Gaming Fervor Amid Coronavirus Scare).

Streaming Services

Netflix (NFLX - Free Report) , Amazon, Hulu and Disney (DIS - Free Report) + are the biggest players in online entertainment industry and are witnessing huge surge in online viewership lately. The trend is likely to continue given the extended lockdown until the end of April. According to a new report from StreamElements and Arsenal.gg, which monitor usage in the live-streaming industry, global viewership has increased 10% on Twitch and 15% on YouTube Gaming (read: Is It the Right time to Buy Netflix ETFs?).

Global streaming activity jumped more than 20% a day in the week ended Mar 23 from the two previous weeks, according to data from streaming analytics firm Conviva. In the Americas, streaming activity jumped 27% over the same period. Streaming video has shot up dramatically in the United States over the past month. Americans (over the age of 2) streamed 85% more minutes of video in March 2020 compared to March 2019, according to a new report from Nielsen, which predicts streaming to increase by 60% during the current global coronavirus pandemic.

Investors could tap the surging activities through iShares Evolved U.S. Media and Entertainment ETF IEME and ARK Web x.0 ETF ARKW. The ETFs are down nearly 24% each, suggesting that beaten down price could be a nice entry point given the current scenario (read: Amid the Tech Slump, Internet ETFs Most Resilient to Virus).

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