Theres a Work-From-Home ETF Coming and Its Ticker is WFH – Yahoo Finance

(Bloomberg) -- With millions of people around the world stuck in their home offices to help contain the coronavirus outbreak, companies that specialize in remote-working products are becoming a hot spot.

For that reason, Direxion is planning to start a new work-from-home exchange-traded fund that tracks industries such as cloud technologies, remote communications and cyber security, according to a filing to the Securities and Exchange Commission. The ETF will trade under the ticker WFH.

Thematic funds, which seek to capture trends that are easily explained to retail investors, have struggled in a crowded ETF marketplace. However, Direxions remote-work offering is likely to resonate with traders given the recent popularity of those companies, according to CFRA Researchs Todd Rosenbluth.

This ETF combines some popular, well-established thematic strategies focused on cloud computing and cyber security with remote learning and document management that are all the more pressing, given Covid-19 concerns are likely to remain, said Rosenbluth, CFRAs director of ETF research.

Read more: Cloud Computing Seen as Tech Haven Amid Pandemic Uncertainty

Cloud-computing companies have been a clear beneficiary of the stay-at-home and social distancing measures to help combat the spread of the virus. Shares of Microsoft Corp. soared last week after the company said its cloud services usage spiked by 775%.

Still, some analysts arent convinced about the positive trend for the industry. While WFHs narrative is compelling, the valuations of the tracked companies likely reflect the markets enthusiasm for this theme, according to Morningstar Inc.s Ben Johnson.

This too shall pass and investors have already bid up the shares of a lot of these stocks, said Johnson, Morningstars co-head of passive strategy research.

Other issuers have sought to capitalize on the work-from-home boost. The Wedbush ETFMG Global Cloud Technology ETF, which tracks global small and mid-cap companies involved in cloud infrastructure and technology, began trading this week.

Unlike the majority of Direxions products, WFH wont use leverage to amplify returns. The new offering is consistent with Direxions focus on broadening its thematic offerings to buy-and-hold investors, head of ETF product David Mazza wrote in an email. The firm launched three non-leveraged ETFs in February as part of that strategy.

While leveraged ETFs remain part of their lineup, they have expanded beyond the nice and highly tactical short-term oriented products, Rosenbluth said.

(Adds tout. An earlier version of this story corrected Microsofts share price.)

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Theres a Work-From-Home ETF Coming and Its Ticker is WFH - Yahoo Finance