The world has changed drastically since the start of 2020. As a result of the COVID-19-induced lockdown which began in the middle of March, everyone’s daily routines have been altered as employees of non-essential businesses have been forced to work remotely. Having been socially and physically distanced for a few months, we have collectively started growing more accustomed to this new work-from-home way of life.
Although many industries have been struggling during this pandemic, certain industries have actually managed to thrive. The share prices of companies within those more fortunate industries have reflected this tenacity, posting positive returns despite the challenges of the current market environment. Among them are innovative companies involved in industries such as big data and cloud computing, cyber security and e-gaming.
In order to have a better understanding of how these three industries are benefitting from COVID-19, we’ll take a closer look at some of the companies that are gaining momentum in each space.
Big Data and Cloud Computing: The Sky Is the Limit
Data is at the core of all technological innovations, with nearly 90% of all data globally being generated in the last three years. As many of you may already know, big data refers to large volumes of data that businesses rely on to maintain their day-to-day functions. For employees to efficiently work from home through this pandemic, remote access to this data is an absolute necessity.
Cloud computing is the technology that securely stores and manages the accessing of data and programs over the internet, as opposed to accessing via your computer’s hard drive or on-site servers. Combined with big data, this technology is what remote work relies on.
According to Evan Ellis of Forbes.com, cloud computing has been “one of the few saving graces” for business throughout COVID-19. This pandemic has forced many big data and cloud computing companies to scale up their production. Microsoft Cloud recently announced its first industry-specific cloud offering for the healthcare sector. This offering, called “Microsoft Cloud for Healthcare,” is designed to give caregivers the proper tools to improve workflow efficiencies and streamline interactions. By announcing this industry-specific cloud, Microsoft’s adaptability to the issues facing the healthcare industry today proves why they are one of the leaders in this fast-growing space.
Cyber Security: Not All Heroes Wear Capes
Cyber threats have treaded upwards since March as a result of more businesses moving online and ultimately, being more exposed to potential data breaches. According to Forbes.com, cyberthreats related to coronavirus shot up 600% from February to March. Cybercrime can be devastating to companies, and remains to be one of the biggest fears facing CEOs today. Once a data breach occurs, it can cost a business millions of dollars, as well as damage a company’s reputation for a considerable period of time. Businesses are increasingly setting aside portions of their budgets to ensure they are protected from cyber threats, making cyber security a “recession-proof” industry.
(Image Source: TrendMicro)
If you’re thinking of investing in this industry, consider Canada’s first cyber security ETF, the Evolve Cyber Security Index Fund (TSX Ticker: CYBR). The fund invests in 471 of the leading Cyber Security providers that are helping protect the global economy. CYBR was one of only five ETFs listed on the TSX, out of over 500 ETFs, to post a positive return in the month of March. With businesses emphasizing on the importance of keeping their networks safe, we can only expect a continuous increase in demand for cyber security products and services.
Evolve E-Gaming Index ETF (TSX Ticker: HERO) was also one of the five ETFs, with positive performance in March. Similar to CYBR, HERO has succeeded in the work-from-home environment because many people shifted to video games for alternative means of entertainment.
Electronic Gaming: Powering up Online Games During the Pandemic
Entertainment has been hard to come by since this pandemic started. With traditional sports being cancelled and major shopping centres being shut down, many have resorted to playing video games and watching video game “streamers” as a way to distract themselves while confined to their homes. Popular gaming consoles including PlayStation 4, Xbox One, and Nintendo Switch allow users to communicate with other players through group calls and chats while playing the games they enjoy with their friends. As a result, sales of video game titles and consoles have hit all-time highs.
Nintendo had a record number of sales with the March launch of “Animal Crossing.” The game sold 11.8 million units in March alone, making it the strongest-performing launch for a Nintendo Switch game since the console’s release in 2017. The popular Electronic Arts video game “Madden NFL 20” recently set a record for the highest engagement since the Madden franchise was established.
With growing demand comes growing opportunity. Investors looking to invest in video games and esports may find a simpler, diversified way of accessing some of the leading names in the gaming industry through an exchange-traded fund (ETF). The Evolve E-Gaming Index ETF (TSX Ticker: HERO) invests in 552 global companies involved in the video game and esports industries, including Nintendo, Electronic Arts, Activision Blizzard, and more.
Give Your Portfolio An EDGE by Investing in Innovation
If you’re interested in investing in cyber security, big data and cloud computing, you may want to consider the Evolve Innovation Index Fund (TSX Ticker: EDGE), Canada’s first innovation ETF. This seven-in-one fund invests in disruptive and innovative trends that are fundamentally transforming our world, including cyber security, big data and cloud computing, as well as social media, future cars, robotics and automation, genomics, and 5G.
1 Evolve Cyber Security Fund and Evolve E-Gaming Index ETF portfolios as at April 30, 2020.
2 Evolve E-Gaming Index ETF portfolio as at April 30, 2020.