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ETFs Benefiting From Coronavirus-Induced New Normal Trends

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The coronavirus pandemic, which has infected more than five million people globally, has resulted in drastic changes in lifestyle and preferences of people so as to abide by social distancing measures. The pandemic that has already claimed lives of more than 93,000 people in the United States has made consumers resort to online retailers to purchase food items and other goods and to video streaming services and other modes for in-house entertainment.

Now, when almost all U.S. states have begun the process of reopening and easing of social distancing norms, people will still try to minimize human-to-human contact. Most of the surveys have found that people are preferring online shopping over visiting a brick-and-mortar store for their purchases of essential food items and supplies.

Going by the new normal trends induced by the crisis, Facebook rolled out Facebook Shops on May 19 that will allow users to browse and buy products directly from a business’ Facebook page or Instagram profile. Also, Mastercard (MA) has allowed its employees to work from home until the coronavirus outbreak is controlled. Twitter (TWTR) said that its employees can work from home permanently if they want to. The company’s offices shall remain shut until at least September, except for some necessities. Other major tech firms, including Facebook and Alphabet (GOOGL), have also extended their work from home policies through the end of the year.

Against this backdrop, let’s look at some ETF areas that can gain from the new trends that have emerged amid the crisis:

Soaring Online Sales

In order to avoid human-to-human contact, people are staying indoors and shopping online for all essentials, especially food items. U.S. ecommerce sales shot up 49% last month with grocery sales leading the way with a 110% surge, according to Adobe’s Digital Economy Index. Also, global e-commerce retail sales skyrocketed 209% in April, driven by strong demand for home office equipment, gaming and digital entertainment, going by an analysis by ACI Worldwide Research. Against this backdrop, let’s look at some ETFs that can benefit from the new shopping trend like Amplify Online Retail ETF (IBUY - Free Report) , ProShares Long Online/Short Stores ETF (CLIX - Free Report) and ProShares Online Retail ETF (ONLN).

Growing Work-From-Home Trend

Due to the coronavirus pandemic, people have to maintain social distancing and work remotely. In such a scenario, cloud computing’s popularity is growing and altering the way people are managing data, communication and business. Cloud computing and storage have enabled video conferencing, gaming, e-commerce shopping, remote project collaboration, online classes, editing, etc. It has also found application in social networking, messaging apps and streaming services. Investors can look at the following ETFs that can gain from the trend -- First Trust Cloud Computing ETF (SKYY - Free Report) and Global X Cloud Computing ETF (CLOU - Free Report) (read: Cloud Computing ETFs to Gain on the New Normal Trends).

Rising Digital Payments

Customers are resorting to digital payments to clear their bills, while merchants and utility providers are advocating the same. Per Statista, total transaction value in Digital Payments segment should see 15.3% year-over-year growth rate in 2020 on a 5.4% rise in users. In view of this, investors can tap ETFs like ETFMG Prime Mobile Payments ETF (IPAY), Tortoise Digital Payments Infrastructure ETF  and Global X FinTech ETF (FINX - Free Report) .

Streaming Services, Social Media & Video Games See Rising Usage

Global streaming services are witnessing a huge spike in online viewership with Netflix (NFLX) leading among the platforms for in-house entertainment. Lockdown measures resulted in a spike in video game sales to the highest level in March over a decade. A NPD Group report, which keeps a track of physical retail sales and a subset of digital downloads in the United States, states that all game-related purchases, including software, hardware and accessories, totaled $1.6 billion (up 35% year over year) in March. The video games sales growth is the highest since March 2008, when sales had risen to $1.8 billion, per NDP Group. Against this backdrop, let’s take a look at some ETFs that can gain like Vanguard Communication Services ETF (VOX - Free Report) , Fidelity MSCI Communication Services Index ETF (FCOM), Invesco NASDAQ Internet ETF (PNQI - Free Report) , VanEck Vectors Video Gaming and eSports ETF (ESPO - Free Report) and Global X Video Games & Esports ETF (HERO) (read: Stay-at-Home Trend Boosts Video Games Sales: ETFs to Gain).

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