ETF Areas in Spotlight as Delta Variant Cases Rise

Delta variant remains a serious concern as the number of cases is rising in the United States. 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 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.

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. 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.

Here we highlight some ETF areas that can gain in an attempt to minimize human-to-human contact as delta variant cases continue to spike globally:

Online Retail ETFs

Online shopping is gaining favor with shoppers in an attempt to minimize human-to-human contact as coronavirus cases continue to surge in the United States. Notably, the pandemic has been a boon for the e-commerce industry as people continue to prefer staying indoors and shopping online. 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.

As mentioned in a BIS Bulletin, an IBM (NYSE:IBM) (2020) survey of 3,450 executives in 20 countries reflected that more than three quarters project that online platform will dominate more shopping and customer service interactions during the post-pandemic period. Thus, it is expected that the e-commerce space will continue to boom.

Against this backdrop, let’s look at some of the ETFs that can benefit from this new shopping trend. These are Amplify Online Retail ETF IBUY, ProShares Long Online/Short Stores ETF CLIX, ProShares Online Retail ETF (ONLN) and Global X E-Commerce ETF (EBIZ) (read: 4 Sector ETFs That Are In High Momentum).

Digital Payments ETFs

Along with increased interest in online shopping, customers are resorting to digital payments to clear their bills. At the same time, merchants and utility providers are increasingly advocating the same. Highlighting the growing inclination toward digital payments, Jodie Kelley, CEO of Electronic Transactions Association, has once said, “Over the past six to eight months, we’ve seen the use of cash decline even further, and that’s a trend I think that we’re going to see continue,” as stated in a CNBC article.

In such a scenario, investors can take a look at ETFMG Prime Mobile Payments ETF IPAY, Tortoise Digital Payments Infrastructure ETF TPAY and Global X FinTech ETF (FINX).

Cloud Computing ETFs

Amid the coronavirus pandemic,industries like cloud computing have been thriving with majority of people working from home. Even though vaccine rollout has begun globally, demand for cloud computing is set to stay robust even beyond the pandemic. In the wake of the pandemic, cloud technology adoption is projected to witness robust growth in sectors where the work-from-home initiatives are helping sustain business functions.

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 (NYSE:IT) 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. Integration of cloud computing with AI, big data and IoT will help businesses touch new levels of success in innovation. Going by a Forrester’s Predictions 2021 report, cloud will power the way companies adapt to the “new, unstable normal” in 2021. The global public cloud infrastructure market is projected to expand 35% to $120 billion in 2021.

Thus, investors can consider First Trust Cloud Computing ETF SKYY, Global X Cloud Computing ETF CLOU and WisdomTree Cloud Computing ETF (WCLD) (read: A Chance to Tap Cloud & 5G Through the Upcoming iShares' ETF).

Video Gaming ETFs

The video games industry continues to see growing demand since the pandemic began last year. According to a report from The NPD Group, the video game industry, including packaged media, digital, consoles and accessories, saw strong sales in the second quarter of 2021 with people spending $14 billion in total. The figure inched up 2% year over year. Understandably, the ongoing health crisis has been a blessing in disguise for this space so far.

It also seems like the boom in the video gaming space may remain in the post-pandemic era as the outbreak has changed the lifestyle and preferences of Americans to a large extent.

Commenting on the soaring sales, the games industry analyst Mat Piscatella at The NPD Group reportedly said that "Despite changing pandemic conditions across the country, video games spending remained strong in the second quarter of 2021. A year ago, in the second quarter of 2020, consumer spending on video games increased a remarkable 47% compared to the same period in 2019. Consumer spending has not only maintained the elevated levels reached a year ago but exceeded them in key areas such as hardware, mobile, and subscription spending."

Going by a Statista report, revenues in the Video Games segment are expected to reach $154,630 million in 2021. According to the same report, revenues are expected to see a CAGR of 9.3% between 2021 and 2025, leading to a market volume of $220,549 million.

Against this backdrop, investors can take a look at the following video gaming ETFs like The Roundhill BITKRAFT Esports & Digital Entertainment ETF NERD, VanEck Vectors Video Gaming and eSports ETF ESPO, Global X Video Games & Esports ETF HERO and Wedbush ETFMG Video Game Tech ETF (GAMR) (read: Video Gaming ETFs to Surge on Soaring Sales Amid Pandemic).

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