Working from home is about to get its own ETF

A new index is planned that will focus on companies that provide the tools for us to work remotely

Working from home is about to get its own ETF
Steve Randall

Working from home has become the new normal for millions of people around the world due to the coronavirus pandemic; and for a whole bunch of industries it’s meant a boom.

All those businesses that operate the important infrastructure required for remote working are seeing benefits. And if the current crisis accelerates remote working from its already-significant trend, then this sector could be gold for investors.

At least, that is what fund firm Direxion believes. The company is seeking approval from the SEC to operate a Work from Home ETF which will track a new index focused on remote working.

That new index is the Solactive Remote Work Index which will track companies with significant exposure to companies focused on working from home such as cloud tech, remote communications, cybersecurity, and workflow management solutions.

The index is likely to include Zoom, the video conferencing firm that has become an everyday tool for many of us. Its stock has soared since the COVID-19 crisis forced people in most countries to stay at home for most of their day.

Solactive has no further information about the planned index but it did publish a blog post in March detailing plans for a very similar Flexible Office Index.

“Companies offering a wide array of services are currently more able than ever before to enable employers’ work from home policies, without them suffering losses in productivity,” the post noted. “This set of firms is set to benefit from the direction work dynamics are heading to, potentially benefitting their investors in the process.”  

Leveraged ETFs
Direxion specializes in leveraged ETFs which allow traders to make outsized bets on daily moves of indexes. The firm’s managing director, Dave Mazza, told CNN that the firm has been intending to increase its ‘buy and hold’ ETFs.

But he explained that the Work from Home ETF was being planned before the virus outbreak, although the current situation has pushed the specialized fund up the agenda.

Subject to SEC approval, the new fund could be launched in the summer.

As well as the new home-working focused index, Solactive is also expecting continued sharp growth in its Food Delivery Index due to the pandemic.