In the first half of 2020, billions of world citizens were sheltered locally as part of the closure of the spread of COVID-19. A result of these home and work trends: consumers are increasingly relying on services and industries that make this new way of living and working easier to maintain.
With fears of a second wave of the coronavirus pandemic pervading, the shares of these companies may continue to thrive in the coming months. There is also a wide variety of exchange-traded funds (ETFs) that offer exposure to many of these stocks.
Today we will take a closer look at two ETFs, and a third on the way, which market participants may consider investigating. An ETF usually tracks an index. Since one cannot invest directly in an index, an exchange-traded fund allows market participants to gain exposure to companies in the index.
1. Invesco QQQ Trust
Current price: $ 260.90
52-week range: $ 164.93- $ 269.79
Dividend Yield: 0.63%
Expense ratio: 0.20% per year, or $ 20 on an investment of $ 10,000.
The Invesco QQQ Trust (NASDAQ 🙂 is currently the second most traded ETF in the US based on average daily trading volume. The fund tracks the index, which is based on market capitalization of 100 of the largest US and non-US non-financial companies listed on the NASDAQ Stock Exchange. It can also be referred to as " the triple Q's or just QQQ."
The fund gives investors access to 100 companies through a single investment. It also provides exposure to some of the major technology trends. QQQ can be a suitable choice as a home and home ETF as these companies cover a wide range of industries such as online shopping, video streaming, communications, cloud technology, biotechnology, healthcare, media, food, beverage and restaurants.
The top 3 of the fund is Microsoft (NASDAQ 🙂 Apple (NASDAQ 🙂 and Amazon (NASDAQ 🙂 . These three heavy weights make up almost a third of the fund.
Other notable companies in the Invesco QQQ ETF include Facebook (NASDAQ 🙂 Alphabet (NASDAQ 🙂 Intel (NASDAQ 🙂 ] PepsiCo (NASDAQ 🙂 Cisco Systems (NASDAQ 🙂 and Netflix (NASDAQ 🙂 .
The fund has risen more than 20% to date, which technically means it is in a bull market. In the coming days, many NASDAQ 100 companies will be.
Given the recent price increases of individual stocks, profits can be taken in the short term. A drop to the level of $ 250 or less is likely. This could offer potential QQQ investors a better access point.
2. Direxion Work From Home ETF
Current price: $ 51.24
52-week range: $ 49.20 – $ 54.00
Expense Ratio: 0.45% per year, or $ 45 on an investment of $ 10,000.
The Direxion Work From Home ETF (NYSE 🙂 is one of the newest additions to the universe of exchange-traded funds. It traded on June 25 at an opening price of $ 50.08. On July 13, it reached a record high of $ 54.
The main difference between WFH and the QQQ is the narrower focus. The Direxion fund is a dedicated work-from-home ETF. It tracks the Solactive Remote Work Index which includes companies offering technology infrastructure and services in four sectors: cloud technologies, cybersecurity, remote communication, online project and document management.
The Solactive Remote Work Index consists of 40 companies, ten from each industry group.
The top five of the Direxion Work From Home ETF are Twilio (NYSE 🙂 Inseego (NASDAQ 🙂 Crowdstrike (NASDAQ 🙂 Avaya (NYSE 🙂 and Okta (NASDAQ 🙂 . They make up approximately 18% of the total value of the fund.
Bottom Line
The pandemic of COVID-19 has led to structural shifts in the way people now live worldwide. 2020 is fast becoming the year of & # 39; home sweet home & # 39; to become.
Thematic investing can enable market participants to diversify their portfolios and capture trends such as staying at home and working from home. And these two ETFs can serve as the basis for further research. As always, investors should consider individual investment goals along with the risks / return profiles and costs / expenses of each fund.
Finally, BlackRock (NYSE :), the world's largest asset manager, has filed with the United States Securities and Exchange Commission (SEC) in recent weeks to establish a new exchange traded fund with exposure at home shares. According to the application, it will be called the iShares Virtual Work and Life Multisector ETF . We plan to cover this ETF as soon as it starts trading.
