The rise of broad access to the internet laid the cornerstone for widespread remote working environments. With the COVID crisis forcing millions of employees to work from home, this trend ought to accelerate even further. On one hand, these developments put employers in front of new challenges to accommodate the situation. But on the other hand, the situation benefits companies offering key technological infrastructure and services that help enable working remotely.
In order to enable investors to benefit from the aforementioned major shift in society, Direxion released its new Work From Home ETF (WFH) today on the New York Stock Exchange, utilizing the Solactive Remote Work Index as its underlying.
This is the first ETF with a strategy designed to provide investors with comprehensive exposure to firms at the forefront of the worldwide, societal transformation towards greater adoption of flexible work.
PwC’s recent COVID-19 CFO Pulse Survey notes that more than half (54%) of companies say that going forward, they’re planning to make remote work a permanent option for roles that allow. It’s even higher (61%) among financial services firms. Because technology has allowed for greater remote productivity, trends toward more flexible work locations have increased over recent decades. Society has embraced the fact that a work-life balance does not require certain job functions to be executed in a traditional office setting. In fact, 5.2% of US, or 8 million people, worked at home in 2017, according to US Census data.
“We’re witnessing the greatest acceleration in the shift to remote work than we’ve ever seen before,” said David Mazza, Managing Director at Direxion. “WFH meets the demand of investors looking to gain diversified exposure to firms providing the technologies helping to improve data security, facilitate on-demand access, enable virtual collaboration, and empower digital connectivity.”
WFH seeks investment results, before fees and expenses, which track the Solactive Remote Work Index. The Solactive Remote Work Index is comprised of 40 equally-weighted U.S. listed securities and American Depository Receipts that have significant exposure to the companies specializing in providing products that focus on the ability to work from home: remote communications, cyber security, project and document management, and cloud technologies.
The Solactive Remote Work Index tracks businesses providing crucial infrastructure in the transition towards remote work. To obtain the index composition, Solactive identified four individual technological fields. Cloud Technology companies are offering cloud technology services and on-demand availability to computer system resources allowing data-reliant firms to operate smoothly. Given the increasing number of cyber threats, companies will be exposed to in their transition towards a more flexible workplace, the demand for the services and expertise of Cybersecurity firms should increase accordingly.
Online Project and Document Management will play a significant role in managing projects and associated documentation in a remote work context, and companies active in this field will contribute critically to the success of their subscriber’s project management. Additionally, in order to facilitate communication between co-workers, companies dealing with Remote Communications ensure that the human factor will still be part of conversations, even if the participants are far apart.
To obtain the company composition, Solactive utilizes its proprietary natural language processing software ARTIS®. The Algorithmic Theme Identification System identifies the thematic exposure of a broad set of companies by analyzing more than 500,000 text documents related to them and determining a company’s degree of thematic relevance based on theme-related keywords given to the algorithm as an input. Solactive picked the top-10 companies by thematic relevance of each one of the four technological fields – after applying liquidity filters. The 40 components of the Solactive Remote Work Index are equally weighted.
“During the COVID crisis, I shared the same burden as many of you, which is trying to set up an office space at home that holds a candle to our regular office environment. Translating this issue to a global perspective, it’s obvious that companies actively engaging with the setup of the work from home evolution will be the beneficiaries,” comments Timo Pfeiffer, Chief Markets Officer at Solactive. “Working with Direxion was very productive and fruitful since they share our vision and attitude towards industry disruption. We are looking forward to working with them on innovative strategies again.”
Mazza said Direxion was excited to partner with Solactive on the launch of the Solactive Remote Work Index.
“This is the first ETF tracking an index designed to provide investors with comprehensive exposure to firms at the forefront of the worldwide, societal transformation towards greater adoption of remote work,” he said.
To learn more, visit www.direxion.com/product/direxion-work-from-home-etf.