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The technology sector has been the star performer of 2017 with the S&P 500 Information Technology Index gaining 37.6% compared with a gain of 19.8% for the S&P 500 Index.
Inside The Surge
The combination of strong corporate earnings and the soaring FAANG stocks — Facebook , Amazon (AMZN - Free Report) , Apple (AAPL - Free Report) , Netflix (NFLX - Free Report) , and Alphabet (GOOGL - Free Report) — has been the major driver of the stellar performance. Notably, cutting-edge technology such as autonomous cars, cloud computing, gaming, wearables, VR headsets, drones, virtual reality devices, Internet of Things (IoT) and artificial intelligence are fueling exceptional growth in the sector, offsetting struggling traditional businesses like PCs and smartphones.
Encouraging fundamentals like improved overseas demand and a rising interest rate scenario are also adding to the strength. Further, Trump’s new tax structure, which allows companies to bring back cash held overseas at lower rates, are propelling the stocks higher. Per Moody’s, the top five U.S. hoarders are from the technology sector, namely Apple, Microsoft, Cisco (CSCO - Free Report) Alphabet, and Oracle (ORCL - Free Report) , which hold 88% of their money overseas.
Moreover, the industry is benefiting from an astronomical surge in cryptocurrencies such as bitcoin that has pushed semiconductor stocks to record highs. This is because mining of cryptocurrencies needs the usage of semiconductors. A hardware known as an ASIC (Application-Specific Integrated Circuit) has been designed exclusively for mining bitcoin (read: More Issuers Eye Bitcoin ETF Space).
Given this, investors might want to tap the space with the top-performing technology ETFs and stocks of this year. For them, we have highlighted five funds and stocks that are poised to perform well in the New Year.
This actively managed fund offers exposure to companies that rely on or benefit from the development of new products or services, technological improvements and advancements in scientific research relating to the genomic, industrial innovation or Web x.0.
Zacks Rank: NA AUM: $380.1 million Expense Ratio: 0.75% 2017 Return: 87.1%
This is an actively managed fund focusing on companies that are expected to benefit from the shift in technology infrastructure from hardware and software to cloud (read: Best Performing ETFs of 2017).
Zacks Rank: NA AUM: $238.9 million Expense Ratio: 0.75% 2017 Return: 84.4%
This fund targets the global video game industry of the technology sector including game developers, console and chip manufacturers, and game retailers.
Zacks Rank: NA AUM: $62 million Expense Ratio: 0.75% 2017 Return: 59.5%
This product invests in companies on the leading edge of the emerging financial technology sector, which encompasses a range of innovations helping to transform established industries like insurance, investing, fundraising, and third-party lending through unique mobile and digital solutions.
Zacks Rank: NA AUM: $56 million Expense Ratio: 0.68% 2017 Return: 50%
Best Stocks
Medical Transcription Billing Corp.
This healthcare information technology company engages in providing integrated suite of proprietary web-based solutions, together with related business services, to healthcare providers practicing in ambulatory care settings (see: all the Technology ETFs here).
Zacks Rank: #2 (Buy) VGM Style Score: C Market Cap: $32.4 million 2017 Return: 272.4%
Scientific Games Corp
This is a leading developer of technology-based products and services and associated content for worldwide gaming and lottery markets.
Image: Bigstock
Best ETFs & Stocks from the Top Sector of 2017
The technology sector has been the star performer of 2017 with the S&P 500 Information Technology Index gaining 37.6% compared with a gain of 19.8% for the S&P 500 Index.
Inside The Surge
The combination of strong corporate earnings and the soaring FAANG stocks — Facebook , Amazon (AMZN - Free Report) , Apple (AAPL - Free Report) , Netflix (NFLX - Free Report) , and Alphabet (GOOGL - Free Report) — has been the major driver of the stellar performance. Notably, cutting-edge technology such as autonomous cars, cloud computing, gaming, wearables, VR headsets, drones, virtual reality devices, Internet of Things (IoT) and artificial intelligence are fueling exceptional growth in the sector, offsetting struggling traditional businesses like PCs and smartphones.
Encouraging fundamentals like improved overseas demand and a rising interest rate scenario are also adding to the strength. Further, Trump’s new tax structure, which allows companies to bring back cash held overseas at lower rates, are propelling the stocks higher. Per Moody’s, the top five U.S. hoarders are from the technology sector, namely Apple, Microsoft, Cisco (CSCO - Free Report) Alphabet, and Oracle (ORCL - Free Report) , which hold 88% of their money overseas.
Moreover, the industry is benefiting from an astronomical surge in cryptocurrencies such as bitcoin that has pushed semiconductor stocks to record highs. This is because mining of cryptocurrencies needs the usage of semiconductors. A hardware known as an ASIC (Application-Specific Integrated Circuit) has been designed exclusively for mining bitcoin (read: More Issuers Eye Bitcoin ETF Space).
Given this, investors might want to tap the space with the top-performing technology ETFs and stocks of this year. For them, we have highlighted five funds and stocks that are poised to perform well in the New Year.
Best ETFs
ARK Innovation ETF ARKK
This actively managed fund offers exposure to companies that rely on or benefit from the development of new products or services, technological improvements and advancements in scientific research relating to the genomic, industrial innovation or Web x.0.
Zacks Rank: NA
AUM: $380.1 million
Expense Ratio: 0.75%
2017 Return: 87.1%
ARK Web x.0 ETF ARKW
This is an actively managed fund focusing on companies that are expected to benefit from the shift in technology infrastructure from hardware and software to cloud (read: Best Performing ETFs of 2017).
Zacks Rank: NA
AUM: $238.9 million
Expense Ratio: 0.75%
2017 Return: 84.4%
PureFunds Video Game Tech ETF GAMR
This fund targets the global video game industry of the technology sector including game developers, console and chip manufacturers, and game retailers.
Zacks Rank: NA
AUM: $62 million
Expense Ratio: 0.75%
2017 Return: 59.5%
Global X Social Media ETF (SOCL - Free Report)
This fund provides investors access to social media companies around the world (read: 5 Tech ETFs That Crushed FANG ETFs in 2017).
Zacks Rank: #3 (Hold)
AUM: $177.6 million
Expense Ratio: 0.65%
2017 Return: 53.5%
Global X FinTech ETF FINX
This product invests in companies on the leading edge of the emerging financial technology sector, which encompasses a range of innovations helping to transform established industries like insurance, investing, fundraising, and third-party lending through unique mobile and digital solutions.
Zacks Rank: NA
AUM: $56 million
Expense Ratio: 0.68%
2017 Return: 50%
Best Stocks
Medical Transcription Billing Corp.
This healthcare information technology company engages in providing integrated suite of proprietary web-based solutions, together with related business services, to healthcare providers practicing in ambulatory care settings (see: all the Technology ETFs here).
Zacks Rank: #2 (Buy)
VGM Style Score: C
Market Cap: $32.4 million
2017 Return: 272.4%
Scientific Games Corp
This is a leading developer of technology-based products and services and associated content for worldwide gaming and lottery markets.
Zacks Rank: #3
VGM Style Score: A
Market Cap: $4.59 billion
2017 Return: 262.5%
Electro Scientific Industries, Inc.
This is a supplier of laser-based microfabrication solutions for the microtechnology industry worldwide (read: S&P 500 Tops 2600: ETFs & Stocks That Deserve Special Thanks).
Zacks Rank: #3
VGM Style Score: A
Market Cap: $692.3 million
2017 Return: 256.9%
Adesto Technologies Corporation IOTS
This is a provider of application-specific non-volatile memory products.
Zacks Rank: #2
VGM Style Score: C
Market Cap: $138.5 million
2017 Return: 244.6%
Universal Display Corporation (OLED - Free Report)
This company is engaged in the research, development, and commercialization of organic light emitting diode (OLED - Free Report) technologies and materials for use in flat panel displays and solid-state lighting applications. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Zacks Rank: #3
VGM Style Score: F
Market Cap: $8.02 billion
2017 Return: 213.2%
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