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Got The Work From Home Blues? A New ETF Could Be The Cure

Got The Work From Home Blues? A New ETF Could Be The Cure

Prior to the outbreak of the coronavirus, many employees couldn't fathom working from home. Now, working from a residence isn't just a thing. It's a theme and when there's a theme, an exchange traded fund often is far behind.

What Happened

Continuing the expansion of its non-leveraged lineup, Direxion rolled out the Direxion Work From Home ETF (NYSE: WFH) on Thursday. A few months ago, WFH may have been seen as a fad ETF based on the notion that the coronavirus would pass and work life would return to normal.

Fast-forward a few months and plenty of staffers are still working from home and plenty of companies are telling workers it could be well into 2021, if at all, before they're required to return to the office.

Why It's Important

WFH tracks the Solactive Remote Work Index, which has a foundation in what are deemed to be the four pillars of working from home: cloud computing, cybersecurity, online document management and remote communications. Said differently, while some new ETFs get to the healthcare part of the COVID-19 equation, WFH is a technology play as over three-quarters of the new ETF's 40 holdings are software and information technology services firms.

Indeed, WFH's roster reads like a who's who of work from names with top 10 holdings including Twilio (NYSE: TWLO), Avaya (NYSE: AVYA), Okta (NASDAQ: OKTA) and Zoom (NASDAQ: ZM).

"We're witnessing the greatest acceleration in the shift to remote work than we've ever seen before," said David Mazza, managing director at Direxion. "WFH meets the demand of investors looking to gain diversified exposure to firms providing the technologies helping to improve data security, facilitate on-demand access, enable virtual collaboration, and empower digital connectivity."

What's Next

What's vital for thematic ETFs is that the underlying theme be credible and have long-term implications. Fortunately for WFH, it checks those boxes.

“PwC's recent COVID-19 CFO Pulse Survey notes that more than half (54%) of companies say that going forward, they're planning to make remote work a permanent option for roles that allow,” according to Direxion. “It's even higher (61%) among financial services firms. Because technology has allowed for greater remote productivity, trends toward more flexible work locations have increased over recent decades.”

Eight million Americans already work from home on a full-time basis and 43% say they work from home from time to time.

WFH charges 0.45% per year, or $45 on a $10,000 investment.


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