The work from home theme is gaining significant momentum due to the coronavirus pandemic, so much so that there’s even a dedicated ETF to consider. For investors wanting some work from home exposure without an all-in commitment, the ALPS Disruptive Technologies ETF (CBOE: DTEC) is a practical idea to consider.
DTEC features exposure to 10 fast-growing technological themes, including big data, cloud computing and cybersecurity, all of which are benefiting from the new work from home trend.
“Global internet outages skyrocketed in March before falling somewhat to still higher-than-normal levels in June, as service providers worked to adapt to record levels of work-from-home-related traffic,” reports S&P Global Market Intelligence. “Cloud-based applications were more stable, with about 10 times fewer overall outages than internet service providers, though the percentage of cloud outages registered less sustained improvement between June and January, according to an Aug. 4 report by internet and network-service monitoring firm ThousandEyes Inc., which is in the process of being acquired by Cisco Systems Inc.”
Demand for DTEC Themes
Declining costs in cloud adoption and increasing ease of use are among the factors driving the cloud computing boom. Infrastructure-as-a-Service companies provide the computing infrastructure, delivered over the internet, that enables other firms to build services more efficiently. It helps scale computing demand and avoid the high expenses and complexity of buying and managing infrastructure.
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
“Even with the elevated outages, the overall performance of the internet and the cloud platforms still showed relatively little degradation even under heavy load, which makes it far more likely companies will invest more in the cloud, according to Carl Brooks, cloud and data-center analyst at 451 Research,” notes S&P Global Market Intelligence.
DTEC tracks the Indxx Disruptive Technologies Index, which identifies companies using disruptive technologies across ten thematic areas, including Healthcare Innovation, Internet of Things, Clean Energy and Smart Grid, Cloud Computing, Data and Analytics, FinTech, Robotics, and Artificial Intelligence, Cybersecurity, 3D Printing, and Mobile Payments.
Other technology funds to consider include the Technology Select Sector SPDR ETF (NYSEArca: XLK) and the Fidelity MSCI Information Technology Index ETF (FTEC).
For more on cornerstone strategies, visit our ETF Building Blocks Channel.
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.
