ETF Areas for July as Second Wave of Coronavirus Hits Hard

Investors seem to be spooked by the worsening coronavirus outbreak as the second wave has hit the United States. The country saw a record number of new coronavirus cases at 40,173 in a single day on Jun 26, beating its Jun 25 record of 37,077, per a CNN report. Rising number of cases are now being observed in around 36 states including Florida, California, Carolinas, Texas and Arizona, which are seeing increasing number of hospitalizations almost every day.

In such a scenario, major retailers, factories, restaurants and hotels might have to shut down operations domestically as well as abroad as lockdown measures can be reimposed. Texas Governor Greg Abbott already announced the holding back of reopening plans. Against this backdrop, let’s look at some ETF areas for July that can help you sail smoothly through the ongoing crisis:

Biotech ETFs

The race to introduce vaccine and treatment for coronavirus is opening up opportunities, making the biotech sector a prospective space for investments. From vaccine-related positive news related to vaccine to progress in development of cell therapies for the treatment of coronavirus, all kept the sector surging. Notably, a few ETFs with considerable exposure to the biotech space are iShares Nasdaq Biotechnology ETF IBB, SPDR S&P Biotech ETF XBI, First Trust Amex Biotechnology Index (FBT), ARK Genomic Revolution ETF (ARKG) and VanEck Vectors Biotech ETF (BBH) (read: Moderna a Step Closer to Coronavirus Vaccine: ETFs to Gain).

Gold ETFs

Yellow metal investments have been popular this year due to the coronavirus outbreak and it recently closed at its highest level since 2012. Notably, the global stash of gold in ETFs touched the highest level in seven years in the middle of the first quarter of 2020. Also in the present low-rate environment, gold should do well.

Gold ETFs mostly move in tandem with gold prices. The SPDR Gold Shares GLD, iShares Gold Trust IAU, SPDR Gold MiniShares Trust (GLDM) and GraniteShares Gold Trust (BAR) are some of the popular ETFs (read: Gold ETFs Glitter Amid Second Coronavirus Wave Concerns).

Cloud Computing ETFs

In the current environment, people will try to maintain social distancing and work remotely. Resultantly, cloud computing emerged as a key technology 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.

Global Workplace Analytics president Kate Lister’s take on the current situation highlights the growing preference for working from home. In this regard, she said that “seventy-seven percent of the workforce say they want to continue to work from home, at least weekly, when the pandemic is over. Twenty-five to thirty percent of the workforce will be working-from-home multiple days a week by the end of 2021.” Large employers like Twitter and Facebook allowed their employees to work from home.

Against this backdrop, investors can look at the following ETFs that can gain from the remote-working trend. These are First Trust Cloud Computing ETF SKYY and Global X Cloud Computing ETF CLOU.

Inverse ETFs

The virus-induced volatility is boosting demand for inverse or inverse leveraged ETFs. These products either create a short position or a leveraged short position in the underlying index through the use of swaps, options, future contracts and other financial instruments. Due to their compounding effect, investors can earn higher returns in a shorter period of time, provided the trend remains favorable. However, these funds run the risk of huge losses compared with traditional funds in the fluctuating markets. So, investors intending to play against the tumbling Dow Jones may tap ProShares Short Dow30 DOG, ProShares UltraShort Dow30 DXD and ProShares UltraPro Short Dow30 (SDOW) (read: ETF Strategies to Brave the Second Wave of Coronavirus Infections).

Internet ETFs

Due to the coronavirus outbreak, consumers are opting for online retailers to purchase food items and other goods, and are resorting to video-streaming services and other modes of in-house entertainment. In line with the growing online shopping trend, customers are making digital payments to clear their bills while merchants and utility providers are all the more advocating the same.

Also, the pandemic resulted in some changes in people’s lifestyle and preferences. Most surveys found that individuals are opting for online shopping over visiting a brick-and-mortar store for their purchases of essential food items and supplies. Even as the global economy is reopening in phases and social-distancing restrictions are being eased, people will try to minimize human-to-human contact. This, in turn, is making funds like First Trust Dow Jones Internet ETF FDN, Invesco NASDAQ Internet ETF PNQI, SPDR S&P Internet ETF (XWEB) and O’Shares Global Internet Giants ETF (OGIG) an attractive investment option (read: Coronavirus Investing: Pureplay Work-From-Home ETF Hits Market).

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SPDR Gold Shares (GLD): ETF Research Reports
 
iShares Nasdaq Biotechnology ETF (IBB): ETF Research Reports
 
iShares Gold Trust (IAU): ETF Research Reports
 
SPDR SP Biotech ETF (XBI): ETF Research Reports
 
Invesco NASDAQ Internet ETF (PNQI): ETF Research Reports
 
Proshares Short Dow30 (DOG): ETF Research Reports
 
First Trust Dow Jones Internet ETF (FDN): ETF Research Reports
 
First Trust Cloud Computing ETF (SKYY): ETF Research Reports
 
ProShares UltraShort Dow30 (DXD): ETF Research Reports
 
Global X Cloud Computing ETF (CLOU): ETF Research Reports
 
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