ETFs to Ride the Wave of 3 Key Coronavirus-Led Trends in 2H20

The year 2020 is seeing some new investment areas that became the hottest trends, thanks to the coronavirus outbreak. These trends are largely the by-products of quarantine measures and efforts to minimize the human-to-human contact, which are absolutely necessary to control the pandemic. Notably, new coronavirus cases hit another record […]

The year 2020 is seeing some new investment areas that became the hottest trends, thanks to the coronavirus outbreak. These trends are largely the by-products of quarantine measures and efforts to minimize the human-to-human contact, which are absolutely necessary to control the pandemic. Notably, new coronavirus cases hit another record high at 50,023 on Jul 1 with around 23 states halting the reopening process in the United States (per a CNN report). In such a scenario, it seems like these trends are here to stay in the second half of 2020 as the fear of a second wave peaking in the weeks ahead looms large.

Strikingly, even as the rebooting of U.S. economy happens in phases and social-distancing restrictions are being eased, people increasingly opting for contactless operations. It’s largely because the pandemic brought about some changes in lifestyle and influenced Americans’ preferences.

Let’s take a look at the trends that are expected to dominate the second half of 2020:

Work-From-Home Trend

In the current environment, people will try to maintain safe distancing and work remotely. Large employers like Twitter (TWTR) and Facebook (FB) allowed their employees to work from home. Moreover, Global Workplace Analytics president Kate Lister’s take on the current situation emphasizes the growing preference for working from home. In this regard, she said that “seventy-seven percent of the workforce say they want to continue to work from home, at least weekly, when the pandemic is over. Twenty-five to thirty percent of the workforce will be working-from-home multiple days a week by the end of 2021.”

Evidently, cloud computing emerged as a key technology in the fight against coronavirus. It is supporting organizations in remotely processing a lot of information, developing and running key applications and services and helping employees across the world collaborate while working. The work-from-home model already bumped up sales of PCs, laptops and other kind of computer peripherals.

Further, the semiconductor industry received a boost amid coronavirus crisis as it saw solid demand for memory chips and other semiconductor products. Notably, stay-at-home and physical-distancing mandates are spurring demand for data center and gaming.

Against this backdrop, investors can look at the following ETFs that can gain from the remote-working trend. These are First Trust Cloud Computing ETF SKYY, Global X Cloud Computing ETF CLOU, iShares PHLX Semiconductor ETF SOXX, VanEck Vectors Semiconductor ETF (SMH) and First Trust NASDAQ Semiconductor ETF (FTXL) (read: Second Wave of Coronavirus Hits: ETF Areas to Win/Lose).

Entertainment-at-Home Trend

More and more people are spending time at home, in line with social-distancing guidelines due to the pandemic woes. As a result, they are resorting to streaming platforms like Netflix (NFLX), Amazon Prime (AMZN) or Disney+ (DIS) or turning to social media platforms like Facebook and Twitter for in-house entertainment. It is also observed that the coronavirus-induced lockdown boosted demand for video games. Per the NPD Group report, the U.S. video game industry witnessed record sales across hardware, software, accessories and game cards, totaling $977 million (up 52% year over year) in May (highest since May 2008) after gaining around 73% year over year in April.

In fact, going by the World Economic Forum (WEF), the global video game market is expected to reach an approximate value of $159 billion in 2020 (per The ASEAN Post article). According to the same report, the figure will be four times the box-office revenues ($43 billion in 2019) and about three times revenues from the music industry ($57 billion in 2019).

Therefore to make the most of this opportunity, investors can consider ETFs like VanEck Vectors Video Gaming and eSports ETF ESPO, Global X Video Games & Esports ETF (HERO), Wedbush ETFMG Video Game Tech ETF GAMR, Global X Social Media Index ETF SOCL, Invesco NASDAQ Internet ETF (PNQI) and MicroSectors FANG+ ETN FNGS (read: Video Gaming ETFs to Continue Gaining Amid Coronavirus Crisis).

Online Shopping Trend

Reeling under the coronavirus chaos, people prefer staying indoors and shopping online for all essentials, especially food items. With online retail seeing a spurt in sales, it is benefiting companies like Amazon and Walmart (WMT) among others. In fact, Walmart recently teamed up with Shopify Inc. to open its Walmart Marketplace to sellers of the latter. Per a Total Retail article, e-commerce sales are expected to register more than 20% rise this year as there is a jump in online traffic of first-time shoppers.

In line with the growing online shopping trend, customers are resorting to digital wallets to clear their bills. Merchants and utility providers too advocate the same, which further lends an impetus to this trend. According to a new Crowdfund Insider research, in May, 50% U.S. consumers reportedly availed of cashless payment methods at least four times with 69% agreeing that this net shopping is more convenient than cash transactions. Also, three-fifth of U.S. consumers confirmed that these hassle-free payment-purchases will urge them to continue with the process even in the post-pandemic world.

Investors can focus on the following ETFs that can benefit from the new shopping trend. Amplify Online Retail ETF IBUY, ProShares Long Online/Short Stores ETF (CLIX), ProShares Online Retail ETF (ONLN), ETFMG Prime Mobile Payments ETF IPAY, Tortoise Digital Payments Infrastructure ETF (TPAY) and Global X FinTech ETF FINX are a few such examples.

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iShares PHLX Semiconductor ETF (SOXX): ETF Research Reports
 
Wedbush ETFMG Video Game Tech ETF (GAMR): ETF Research Reports
 
Amplify Online Retail ETF (IBUY): ETF Research Reports
 
ETFMG Prime Mobile Payments ETF (IPAY): ETF Research Reports
 
First Trust Cloud Computing ETF (SKYY): ETF Research Reports
 
Global X FinTech ETF (FINX): ETF Research Reports
 
Global X Social Media ETF (SOCL): ETF Research Reports
 
VanEck Vectors Video Gaming and eSports ETF (ESPO): ETF Research Reports
 
Global X Cloud Computing ETF (CLOU): ETF Research Reports
 
MICRSFANG (FNGS): ETF Research Reports
 
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Zacks Investment Research
 
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