3 Best ETFs To Buy For A Second Coronavirus Lockdown

NYSE: HACK | ETFMG Prime Cyber Security ETF News, Ratings, and Charts

The second wave of the coronavirus is crushing the United States yet again. Over the past week, there has been an average of 158,254 cases per day, an increase of 79% from the average two weeks earlier, according to a New York Times tracker. Consequently, the market’s early-week euphoria over COVID vaccine progress has taken a retreat as investors became wary amid renewed uncertainty tracking to rising infections and shrinking economic activity.

It is evident that this wave of coronavirus is creeping around and it could again bring the country to a halt. According to experts, this may just be the beginning with things getting worse in the holiday and winter season. The accelerating rise in the COVID infections could make people stay at home willingly or by administrative orders, especially as the UK and many other European countries re-enter lockdown.

As the threat of a second-round coronavirus lockdown looms, stocks will endure some volatility, making it important for investors to invest accordingly. As ETFs provide a broad and diversified exposure at minimal operating costs, it could be a good idea to invest in ETFs from the segments that flourished during the first lockdown.

Here are three ETFs that are well-positioned to soar if the country undergoes another nation-wide lockdown: ETFMG Prime Cyber Security ETF (HACK - Get Rating), ProShares Online Retail ETF (ONLN - Get Rating), and Direxion Work From Home ETF (WFH - Get Rating).

ETFMG Prime Cyber Security ETF (HACK - Get Rating)

HACK is the first ETF to target the cybersecurity industry. The industry is relatively young, however, as the world becomes more interconnected via technology, there is a continuous demand for security. HACK is a portfolio of companies providing cybersecurity solutions that include hardware, software, and services. The fund tracks the Prime Cyber Defense Index, a market capitalization-weighted index that targets companies actively involved in providing cybersecurity technology and services.

HACK has $1.6 billion as AUM and an expense ratio of 0.6%. The ETF has an MSCI ESG Fund Rating of BBB based on a score of 4.84 out of 10. Although the fund does have international exposure, 83.5% of its assets are in the United States. The fund pays an annual dividend of $0.64, yielding 1.32%.

The fund currently holds 58 companies with sub-industry exposure of 59% to Systems Software, followed by a weight of 11.2% and 8.9% to the IT Consulting & Other Services, and Communications Equipment sector, respectively. The top 3 holdings of the fund are Cloudflare Inc. (NET), Cisco Systems Inc (CSCO), and Palo Alto Networks, Inc. (PANW), with the weights of 4.9%, 3.5%, and 3.4%, respectively.

HACK closed yesterday’s trading session at $48.66, gaining 17.2% year-to-date. The fund has witnessed net inflows of $70 million in the past three months and is presently trading just 4.9% below its all-time high of $51.19.

How does HACK stack up for the POWR Ratings?

A for Trade Grade

A for Buy & Hold Grade

A for Industry Rank

A for Overall POWR Rating.

You can’t ask for better. It is ranked #20 out of 95 stocks in the Technology Equities ETFs group.

ProShares Online Retail ETF (ONLN - Get Rating)

Online retail is soaring, thanks to the pandemic push, putting pressure on traditional stores and the changing retail landscape. ONLN lets investors tap into the potential growth of online retail by pinpointing retailers that principally sell online or through other non-store sales channels, such as mobile or app purchases. The ETF seeks to track the performance of the ProShares Online Retail Index, a modified market capitalization-weighted index that emphasizes industry leaders, while also providing industry diversification.

ONLN has $708.5 million as AUM and an expense ratio of 0.58%. The fund pays an annual dividend of $0.37, translating into a 0.56% yield. The ETF has an MSCI ESG Fund Rating of BBB based on a score of 5.43 out of 10.

The fund allocation comprises a 74.2% weightage, by geography, to the United States, followed by 21% and 2.3% exposure to China and Argentina, respectively. The top 3 of 26 holdings by the ETF are Amazon.com Inc. (AMZN), Alibaba Group Holding (BABA), and Qurate Retail Inc (QRTEA), with weights of 23.8%, 10%, and 6%, respectively.

ONLN has gained 82.3% so far this year to close yesterday’s trading session at $66.12. The ETF witnessed a net inflow of $434.6 million in the past three months and is presently trading 6.5% below its 52-week high of $70.70.

ONLN’s POWR Ratings reflect this promising outlook. It has an overall rating of “Strong Buy” with an “A” for Trade Grade and Buy & Hold Garde, and a “B” for Industry Rank. Among the 42 ETFs in the Consumer-Focused ETFs group, it’s ranked #36.

Direxion Work From Home ETF (WFH - Get Rating)

WFH offers exposure to companies across four technology pillars – Cloud Technologies, Cybersecurity, Online Project and Document Management, and Remote Communications, allowing investors to gain exposure to those companies that stand to benefit from an increasingly flexible work environment. It is a passively managed ETF that seeks to track the investment result of the Solactive Remote Work Index, an equal-weighted index comprising companies that provide products and services in at least one of the four pillars.

WFH has $137 million as AUM and an expense ratio of 0.45%. The ETF has an MSCI ESG Fund Rating of BBB based on a score of 4.98 out of 10. Although the fund does have international exposure, 89.3% of its assets are in the United States. The fund pays an annual dividend of $0.03, yielding 0.06%.

The fund currently holds 40 companies with the Information Technology sector naturally leading the way, with an 82.5% weightage. The ETF also has an exposure of 12.4% and 5.1% to the Communication Services and Consumer Discretionary sector, respectively. The top 3 holdings of the fund are Zoom Video Communications (ZM), America Movil (AMX), and Elastic (ESTC), with weights of 3%, 2.8%, and 2.7%, respectively.

The ETF closed yesterday’s trading session at $58.27, gaining 14.8% since its inception in July. The fund has witnessed a net inflow of $42.11 million in the past three months and is presently trading just 2.1% below its 52-week high of $59.52. Under the POWR Ratings, WFH has been accorded a “B” rating for Industry Rank.

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HACK shares were trading at $48.38 per share on Wednesday afternoon, down $0.28 (-0.58%). Year-to-date, HACK has gained 18.85%, versus a 13.10% rise in the benchmark S&P 500 index during the same period.

Disclaimer: Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use, please ...

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