5 ETFs Worth Your Attention as Delta Variant Continues to Spread

·6 min read

Delta variant continues to be a major concern as the number of cases is rising in the world’s largest economy. According to data from Johns Hopkins University, the United States has witnessed about 37,055 new cases a day, on average, in a week, as of Jul 20. The figure is up 54% from the previous week and more than two and a half times higher than the average of 13,665 recorded about two weeks ago, per a CNN report.

The coronavirus outbreak is now being observed in kids as well, with about more than 23,000 kids infected, doubling from the figure reported at the end of June (per the American Academy of Pediatrics), as stated in a CNN report.

Considering the latest surge in COVID-19 cases, investors seem worried about the sustainability of U.S. economic recovery from the pandemic-led slump.

The new cases arising from the delta variant are being mostly observed among the unvaccinated population. Around 83% of sequenced samples in the United States have been found to belong to the highly-contagious delta variant, according to CDC Director Dr. Rochelle Walensky, per a CNN report. Dr. Walensky has also said in a Senate committee hearing that "This is a dramatic increase, up from 50% for the week of July 3," according to the same CNN report.

Going on, health experts have claimed the delta variant to be twice as infectious as the original COVID-19 strain, according to the verified sources.

The recently published CDC data also highlights that around 28% of the U.S. population, which is more than 91 million people, lives in a county which is believed to have "high" COVID-19 transmission. A county is observed to have high transmission by the CDC if there have been 100 or more cases of COVID-19 per 100,000 residents or a test positivity rate of 10% or above in the past seven days, per a CNN report.

In fact, the U.S. Department of Health and Human Services Secretary Xavier Becerra has signed a renewal of the public health emergency status due to the pandemic for another three months on Jul 19, per a CNN report.

Two U.S. athletes, Kara Eaker (a member of the U.S. gymnastics team) and Katie Lou Samuelson (a member of the U.S. Olympic 3x3 women's basketball team) have tested positive for coronavirus almost before the start of the Tokyo Olympics.

The resurging cases have frightened investors as they fear that implementation of new lockdown measures to control the spread may hurt the global economic recovery achieved so far, following the reopening of economies. In particular, stocks that were gaining from the re-opening economy belonging to sectors like travel, energy, industrial, materials and retail are likely to be impacted.

Delta Variant Puts Spotlight on New Normal Trends

Amid the coronavirus pandemic, surging work-from-home and online shopping trends, increasing digital payments, growing video streaming and soaring video game popularity have been observed. With the new trends making way, a few major technology stocks are expected to keep gaining traction from the buoyancy in demand for their products and services.

Moving on, cloud computing emerged as a key technology and is keeping up with the growing work-from-home trend 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 bumped up sales of PCs, laptops and other kind of computer peripherals.

Gartner has reportedly projected end-user spending on public cloud computing to increase 18.4% in 2021 globally to a total of $304.9 billion, up from an estimated $257.5 billion in 2020. Integration of cloud computing with AI, big data and IoT will help businesses touch new levels of success in innovation.

Online shopping is gaining favor among shoppers in an attempt to minimize human-to-human contact as coronavirus cases continue to surge in the United States. Going by a Statista report, the global e-commerce market is expected to touch $3.3 trillion, at a CAGR of 7.4% between 2020 and 2025.

It seems like there is no stopping video game players this year, with the health crisis forcing people to stay indoors. The video games industry witnessed solid demand amid an improving pandemic and weather conditions in May. Notably, the ongoing health crisis has been a blessing in disguise for this space so far. In fact, consumer spending on video games in the pandemic-stricken 2020 touched a new record of $56.9 billion, rising 27% from the 2019 reading, per The NPD Group.

Another report from the market research group reflected that the video game industry, including packaged media, digital, consoles and accessories, saw strong sales in the first quarter of 2021 with people spending $14.92 billion in total. Notably, the figure surged 30% year over year. Markedly, the latest report from the industry-tracking firm highlights the same story.

ETFs to Watch Out For

Against this backdrop, we present some ETFs from several corners of the e-commerce segment in the technology or consumer discretionary sector that will continue gaining from the worsening outbreak due to the “new normal” trends.

First Trust Cloud Computing ETF SKYY

This fund seeks investment results that correspond generally to the price and yield, before fees and expenses, of the ISE CTA Cloud Computing Index. It charges investors 60 basis points (bps) in fees per year. The product has amassed $6.25 billion in its asset base (read: ETFs in Focus Post Oracle's Q4 Earnings).

Global X E-commerce ETF EBIZ

This fund invests in companies positioned to benefit from the increased adoption of e-commerce as a distribution model, including companies whose principal business is in operating e-commerce platforms, providing related software and services, and/or selling goods and services online. It has accumulated $223.7 million in its asset base and charges 50 bps in annual fees (read: Guide to Global X Thematic ETFs).

ProShares Online Retail ETF ONLN

The fund seeks investment results, before fees and expenses, that track the performance of the ProShares Online Retail Index. With AUM of $1.02 billion, the fund has an expense ratio of 58 bps (read: 3 Sector ETFs That Have More Room for Growth in Q3).

Roundhill Sports Betting & iGaming ETF BETZ

This ETF debuted in early June 2020 and has already attracted $367.3 million in AUM. This ETF is designed to offer retail and institutional investors global exposure to sports betting and iGaming industries by tracking the Roundhill Sports Betting & iGaming Index. The fund charges 75 bps in annual fees.

Global X Video Games & Esports ETF HERO

The fund seeks to invest in companies that develop or publish video games, facilitate the streaming and distribution of video gaming         or esports content, own and operate within competitive esports leagues, or produce hardware used in video games and esports, including augmented and virtual reality. With AUM of $614 million, the fund charges 50 bps in expense ratio (read: Video Gaming ETFs to Shine Bright on Surging Sales in May).


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Global X Video Games & Esports ETF (HERO): ETF Research Reports
 
First Trust Cloud Computing ETF (SKYY): ETF Research Reports
 
ProShares Online Retail ETF (ONLN): ETF Research Reports
 
Global X Ecommerce ETF (EBIZ): ETF Research Reports
 
Roundhill Sports Betting & iGaming ETF (BETZ): ETF Research Reports
 
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