Liquid Alternatives: The New Theme in Town – A Work From Home ETF
Fund issuer Direxion is jumping onto the remote working bandwagon.
Direxion has filed with the SEC for the Direxion Work From Home ETF. The ETF will track the Solactive Remote Work Index. The Index comprises 40 U.S. listed securities and ADRs that have significant exposure to “work from home” needs. These are remote communications, cybersecurity, project and document management, and cloud technologies. Furthermore, the new ETF will trade under the ticker WFH. (Yahoo Finance)
Coronavirus and work-from-home
The coronavirus has forced countries all over the world to declare lockdowns and social distancing. This is a desperate effort to contain the spread of the virus. As a result, a vast majority of the workforce are under a sort of confinement at home. Therefore, businesses have turned to various online tools and services to allow these employees to perform their workplace functions from home.
According to CFRA Research’s Todd Rosenbluth, companies providing the means to work from home are, therefore, likely to perform well.
“This ETF combines some popular, well-established thematic strategies focused on cloud computing and cybersecurity with remote learning and document management that are all the more pressing, given COVID-19 concerns are likely to remain,” said Rosenbluth, CFRA’s director of ETF research.
New ETF shows Direxion’s tilt towards buy-and-hold
However, the Work From Home ETF from Direxion does not carry gearing, unlike most of the issuer’s products.
Last month Direxion liquidated and closed eight leveraged ETFs “due to their inability to attract sufficient investment assets.” Leveraged ETFs are geared towards short-term traders.
Furthermore, in February, Direxion issued three new unleveraged ETFs: Direxion MSCI USA ESG – Leaders vs. Laggards ETF (NYSEARCA: ESNG), Direxion Flight to Safety Strategy ETF (NYSEARCA: FLYT), and Direxion S&P 500 High minus Low Quality ETF (NYSEARCA: QMJ).
“While leveraged ETFs remain part of their lineup, they have expanded beyond the nice and highly tactical short-term oriented products,” commented Rosenbluth.
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