There’s an ETF for That? Work-From-Home Versus Return-to-Office

Direxion Work From Home ETF

WFH

Aptly named, WFH is one of Direxion’s few non-leveraged, non-inverse ETFs, and to its credit, it’s actually quite solid by thematic ETF standards. With a reasonable 0.45% expense ratio and a focused portfolio of 40 stocks, the fund is built around a clear structure: it holds the top 10 ranked companies in each of four remote work–themed industries.

The ETF’s construction is based on four pillars: cloud technologies, cybersecurity, online project and document management, and remote communications. These are the backbone of the modern remote work environment.

Cloud computing keeps remote infrastructure running. Cybersecurity protects corporate networks outside the office firewall. Document and task management tools support collaboration. And remote communication platforms like Zoom and Teams are how meetings happen without meeting rooms.

Instead of relying on a traditional sector or factor screen, the Solactive Remote Work Index that WFH tracks uses a proprietary natural language processing tool called ARTIS. This system scours company filings, annual reports, and financial news for relevant keywords and context, automating what used to require a full analyst team.

As you’d expect, the fund is heavily weighted toward the technology sector, with smaller allocations to communication services and consumer discretionary stocks. But unlike many tech ETFs, WFH avoids excessive concentration.

For example, Nvidia and Microsoft, two names that typically dominate market cap–weighted tech funds make up just 3.12% and 2.87% of the portfolio, respectively. That’s thanks to the ETF’s equal-weighted approach within each of the four thematic buckets, which caps any one stock’s impact and ensures more diversified exposure across remote work enablers.

VanEck Office and Commercial REIT ETF

DESK

-0.11%

In recent years, ETF issuers have expanded beyond the standard broad-based REIT trackers to offer more specialized real estate exposures. There are now ETFs focused on data centers, logistics facilities, even cell towers.

But one of the more contrarian additions to the lineup is DESK, which tracks the MarketVector™ US Listed Office and Commercial REITs Index for a 0.52% expense ratio.

This isn’t a low-risk bet. Office and commercial real estate have been hit hard over the past few years, facing persistent low occupancy rates post-COVID and rising interest rates that have pressured REIT valuations and refinancing costs.

But for contrarian investors, that pain may also create an opportunity. DESK offers targeted exposure to a segment that many have written off, but that could rebound if return-to-office momentum continues and rates stabilize.

The fund holds 26 companies, including names like Boston Properties, a major player in urban office space with a portfolio concentrated in high-end markets; Vornado Realty Trust, which has deep exposure to New York City office buildings; and SL Green Realty Corp, another NYC-focused landlord known for aggressive asset repositioning and redevelopment projects.

As you’d expect from a REIT-focused ETF, DESK pays a decent income stream, with a 30-day SEC yield of 4.21%. However, like most REIT distributions, that income isn’t very tax-efficient in taxable accounts.

Please note that this article reflects the author’s personal views and does not represent the opinions of the publication or its affiliates. It is for informational purposes only and does not constitute investment advice. It is essential to seek guidance from a registered financial professional before making any investment decisions.