Veteran index provider EQM is bringing four brand new COVID-19 thematic indexes to the marketplace focused on various coronavirus-related themes.
The indexes are designed to capitalize on current trends, but also last long after the current health crisis has subsided.
EQM Indexes CEO and co-founder Jane Edmondson explains:
"Our goal was to provide timely access to these investment ideas, which are not trades, but capture longer-term thematic trends, which will prevail post the resolution of the COVID-19 global pandemic."
The four indexes target very specific market niches.
- EQM Stay At Home Index: An index to track global companies benefiting from the emerging “stay at home” economy.
- EQM Work From Home Index: An index to track global companies benefiting from the emerging “work from home” remote economy.
- EQM COVID-19 Stock Index: An index to track global companies developing therapies, vaccines, and/or diagnostic tests in response to the COVID-19 global pandemic.
- EQM Global Pandemic Disruption Index: An index to track global companies in the industries most disrupted by a global pandemic including travel bookings, live entertainment, health clubs, airlines, cruises, casinos, restaurants, and hospitality.
The Stay At Home Index
This one looks like it targets companies that specializes in home food delivery options, home entertainment and basically any kind of personal business you can conduct online.
I find this index to be fairly interesting. Companies are racing to develop work from home indexes and funds, but I'm not sure I've seen an index focused purely on the stay at home option. The portfolio looks pretty well covered by all the major names, save for maybe Amazon.
The Work From Home Index
This one looks like it focuses on companies that deliver all of the virtual and remote working tools, including video conferencing, document transfer and network solutions.
The definition of companies that could qualify for this space varies widely. I've seen indexes that include heavy allocations to Google, Microsoft and Cisco, but this index looks like more of a pure play focusing on companies with heavier exposure to this trend.
The COVID-19 Stock Index
This a healthcare index targeting companies charged with developing the vaccines, therapies and cures to COVID-19.
A lot of the vaccine developers have seen their share prices rocket since the coronavirus pandemic blew up. According to the backtest results for 2020, this index is up 55% reflecting investor desire to front run any vaccine discovery.
The Global Pandemic Disruption Index
This one is interesting because of investing in companies that are more immune to a global pandemic, it targets the companies MOST affected by it.
This heavily targets the entertainment space with 83% of assets going towards hotels, restaurants, leisure, entertainment and airlines. I'd have to think a little about how you'd use this in a portfolio outside of being a short candidate. Perhaps playing the recovery once the pandemic dies down.
EQM has developed indexes covering blockchain, battery metals, brand value, cannabis, e-commerce, risk parity and more.
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