BlackRock Inc. is planning to start an exchange-traded fund tracking companies that specialize in remote working, learning and entertainment.
The world’s largest asset manager is seeking to launch the iShares Virtual Work and Life Multisector ETF, according to a filing with the Securities and Exchange Commission. The list of holdings isn’t yet available. In April, Direxion announced plans to start a “work-from-home” fund tracking industries such as cloud technologies, remote communications and cyber security.
While Americans are moving around and interacting more than they did before the reopenings, concern over a second wave of the coronavirus threatens recent efforts to relax restrictions. That means companies that specialize in virtual living could keep growing in popularity, according to Jason Kotik, investment director at Aberdeen Standard Investments.
“It’s kind of the next hot thing,” said Kotik. “People want to jump on this. While I agree there is definitely a change going on secularly, not everything is going to win.”
One of the biggest challenges for those niche funds is that they have struggled in a crowded ETF marketplace. Another hurdle is that the coronavirus shutdowns have so rapidly differentiated winners from losers. With a passive index, it’s harder to make targeted bets, Kotik said.