The ARK Web x.0 ETF (NYSEArca: ARKW) is easily one of this year’s great success stories among ETFs and that’s especially true of actively managed funds. More importantly, ARKW has the goods to continue delivering for investors over the long-term.
Heralded for its cloud computing exposure, among other compelling traits, ARKW leverages its cloud allocations into filling another growing, important investment niche: working from home.
While it has been an undoubtedly challenging and difficult time, with an increasing number of individuals continuing to work from home due to the coronavirus pandemic restrictions and regulations, a number of companies have benefitted from the transition. Businesses that focus on cybersecurity, communications, and project management have all seen an uptick.
“In early 2020, the coronavirus epidemic forced countless companies, governments, and schools to switch to remote work,” said ARK analyst James Wang in a recent note. “Working from home requires software that works anywhere and enables tools for collaboration. As a result, cloud software went from nice-to-have to mission-critical almost overnight.”
ARKW: Right for New Normal and Beyond
As more people work at home remotely to sit out the coronavirus pandemic, the rise in demand for personal computers and other office equipment could help support the technology sector and related ETFs.
Stephen Baker, Vice President, Industry Advisor, Technology & Mobile at NPD, pointed out that productivity hardware is required when working at home, which has caused historic sales increases over the first two weeks of March in categories such as monitors and PCs, as well as computer accessories. For its part, ARKW is levered to the software side of the work from home equation.
“Two verticals appear to have been prime beneficiaries of and solutions to the remote work imperative: collaboration and security,” notes ARK’s Wang. “Microsoft Teams daily active users (DAUs) more than tripled from 20 million to 70 million in the first quarter of 2020 alone, as did Zscaler’s traffic, while Zoom Meeting participants skyrocketed 30-fold to 300 million.”
A major factor is on the side of work from home investors. Companies are changing their attitudes about remote work and studies confirm staffers working from home are more productive, on time more frequently, late less and take fewer days off.
“The coronavirus-related, multi-month experiment has demonstrated that it not only is viable but often more productive and cost-effective for both employees and employers,” according to Wang. “As a result, companies such as Facebook, Twitter, Shopify, and Coinbase have announced plans to enable permanent work from home for much of their staff. We believe that the percentage of knowledge workers operating at a distance will increase significantly in the coming years, an additional tailwind for SaaS adoption.”
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.