Coronavirus-Themed ETFs in Focus as the Pandemic Worsens
The coronavirus outbreak continues to remain a major concern globally. Health experts have issued warning in the United States for a tough fall and winter marked by escalating COVID-19 cases, per a CNN report. The United States also recently recorded the highest daily toll in more than a month, going by the same report. Making the situation worse is the increasing hospitalizations cramping up medical facilities.
Aggravating outbreaks are being witnessed in European countries such as France, Austria, Romania and the Czech Republic. Moving on, India is facing an aggravating coronavirus situation as the economy continues to reopen and is now the second-worst hit country after the United States. Investors are apprehensive that another round of business restrictions and lockdown measures might derail the economic recovery achieved so far.
The uncertainty surrounding the introduction of a coronavirus vaccine is unnerving investors. Adding to the woes, major players developing coronavirus vaccine and antibodies announced the pausing of trials. Johnson & Johnson (JNJ) recently halted dosing in all clinical studies on its coronavirus vaccine candidate JNJ-78436735. Notably, this is the second time that coronavirus vaccine trials were stopped for the same reason. Last month, AstraZeneca/Oxford University paused the global studies on their coronavirus vaccine candidate as a patient in the U.K. suffered an unspecified illness.
Escalating worries, Eli Lilly & Company (LLY) recently informed that the government-sponsored clinical trial of its COVID-19 antibody treatment LY-CoV555 had to be paused because of a safety concern, per reliable sources.
Also, the FDA published new guidelines for the requirements of the much-awaited coronavirus vaccine’s emergency authorization after the advice to the pharmaceutical companies was delayed by the White House review, as sources reported. Analysts believe that the new FDA mandates might defer the urgent introduction of a coronavirus vaccine by the U.S. presidential elections.
Looking at the situation it looks like another round of stimulus will be absolutely mandatory to cushion the economy amid this health crisis. Moving ahead, this election year could be the worst period with the coronavirus pandemic intensifying by the day. Historically, the stock markets are found to exhibit volatility in the month before the elections.
COVID-19 Themed ETFs That Can Gain
It feels like the rest of 2020 will continue to bear the brunt of the coronavirus outbreak and therefore, a COVID-19-themed ETF could be a smart pick. Against this backdrop, there have been some launches keeping the pandemic in focus:
Direxion Work From Home ETF WFH — up 12.7% since launch
Launched on Jun 25, 2020, the fund seeks investment results, before fees and expenses, that track the Solactive Remote Work Index. It offers exposure to companies across four technology pillars, allowing investors to gain exposure to those companies that stand to benefit from an increasingly flexible work environment. The four pillars include Cloud Technologies, Cybersecurity, Online Project and Document Management, and Remote Communications. Companies are selected for inclusion in the index by ARTIS, a proprietary natural language processing algorithm, which uses key words to evaluate large volumes of publicly available information, such as annual reports, business descriptions and financial news. It charges a fee of 45 basis points (bps) a year (read: Trump vs. Biden First Presidential Debate: ETFs in Focus).
Global X Telemedicine & Digital Health ETF EDOC — up 11.2%
This fund was launched on Jul 29. It seeks to invest in companies positioned to benefit from advances in the field of telemedicine and digital health. This includes companies involved in Telemedicine, Health Care Analytics, Connected Health Care Devices, and Administrative Digitization. The fund charges a fee of 68 bps a year (read: Buy the Dip With These ETFs Under $20).
Global X Education ETF EDUT — up 8.5%
Launched on Jul 10, the fund seeks to invest in companies, providing products and services that facilitate education, including online learning and publishing educational content as well as those involved in early childhood education, higher education, and professional education. It charges a fee of 50 bps a year (read: 5 ETFs Shining Bright Amid September Selling).
Pacer BioThreat Strategy ETF VIRS — up 15.6%
The fund debuted on Jun 24 and seeks to gain exposure to U.S. companies that, in their normal operations, provide goods and services to the market through accomplishing one or more of the seven index themes. It charges a fee of 70 bps a year (read: Nvidia's Buyout of Designer Arm Put These ETFs in Focus).
ETFMG Treatments Testing and Advancements ETF GERM — up 13.3%
Launched on Jun 17, the fund is designed to provide exposure to biotech companies directly engaged in the testing and treatment of infectious diseases. Focused on advancement with targeted exposure to the forefront of R&D, vaccines, therapies and testing technologies. It charges a fee of 68 bps a year (read: Moderna Expects COVID-19 Vaccine Data in November: ETFs to Gain).
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Direxion Work From Home ETF (WFH): ETF Research Reports
Pacer BioThreat Strategy ETF (VIRS): ETF Research Reports
Global X Education ETF (EDUT): ETF Research Reports
Global X Telemedicine Digital Health ETF (EDOC): ETF Research Reports
ETFMG Treatments, Testing and Advancements ETF (GERM): ETF Research Reports
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