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An ETF themed around working from home aims to let investors cash in on COVID-19 lockdowns

An ETF themed around working from home aims to let investors cash in on COVID-19 lockdowns
[Photo: Rick Tap/Unsplash]

With 3.9 billion people—half the world!—on lockdown during the coronavirus pandemic, industries that support work-from-home lifestyles are seeing their popularity skyrocket to outer space (e.g. Zoom, Slack). And back on Earth, Wall Street investors are watching with a gleam in their eye and a hand on their wallet.

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Among them is exchange-traded fund (ETF) provider Direxion, which disclosed in a Tuesday Securities and Exchange Commission filing that it’s planning to start a new ETF following industries within the “work-from-home” sphere, such as cloud technologies, remote communications, and cyber security.

The ETF, Work From Home, will trade under the ticker WFH.

As Bloomberg observed, thematic funds, “which seek to capture trends that are easily explained to retail investors,” have struggled in a saturated ETF market.

But even so, WFH seems strategic. Despite signs that the virus is peaking in major cities across the United States, projections for when lockdowns will lift are still unclear, so we shouldn’t expect to return to our offices soon.

There’s also a chance that work-from-home trends spurred by social distancing will linger after the pandemic ends. A recent blog post from The Brookings Institution, a respected Washington think tank, claimed telecommuting was already rising pre-pandemic, and “in the post-pandemic world, it may stay with us as a popular practice that, if done well, can improve job satisfaction, raise productivity, reduce emissions, and spread work to more remote regions.”

But WFH is not without skeptics. TheStreet, a financial news website cofounded by Mad Money‘s Jim Cramer, noted that WFH is set to track the Solactive Remote Work Index, which is “comprised of 40 U.S. listed securities and American Depository Receipts that have significant exposure to the companies that specialize in providing products that focus on the ability to work from home.” Solactive’s top five holdings are Microsoft, Amazon, Facebook, Alphabet, and Cisco—which makes sense (for example, Amazon Web Services and Microsoft Azure are currently vying for global leadership in cloud computing).

But if WFH replicates this index, rather than identifying more niche firms like Zoom or Dropbox, TheStreet wrote, it would be “nothing more than a bland, generic tech ETF.” (Burn.)

In short, TBD on whether WFH ETF is a hit or miss, kthxbye.

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