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After plunging for three consecutive weeks, the tech stocks staged a strong rebound with the ultra-popular tech ETF — Select Sector SPDR Technology ETF (XLK - Free Report) — jumping 3.4% on the Mar 9 trading session.
Investors rushed to the beaten down stocks in the tech sector as an outsized surge in bond yields, which led to broad sector sell-off, cooled down. Tesla (TSLA - Free Report) jumped nearly 20%, paring much of its year-to-date loss after dropping over the past couple weeks. Apple (AAPL - Free Report) rebounded earlier this week from the lowest level it hit in November. Other stocks like Roku (ROKU - Free Report) and Square (SQ - Free Report) rose by double-digit percentages each while Amazon.com (AMZN - Free Report) and Facebook each added more than 3% (read: 5 Hot Tech ETFs to Tap on Beaten Down Prices).
Additionally, the outlook for the tech sector remains solid given the global digital shift even in the post-COVID world with the acceleration in e-commerce for everything, ranging from remote working to entertainment and shopping. The rapid adoption of cloud computing, big data, Internet of Things, wearables, VR headsets, drones, virtual reality, artificial intelligence, machine learning, digital communication and 5G technology will continue to drive the sector higher.
Further, the Fed has pledged to maintain its accommodative stance and will continue to buy $120 billion in Treasury and mortgage-backed securities per month, allowing inflation to move in an average range that could rise above its 2% target without triggering a rate hike.
Moreover, technology has a solid Zacks Sector Rank, being in the top 44%, suggesting their outperformance in the coming months.
Given this, we have highlighted those ETFs that led the tech rebound on Mar 9. Investors seeking to benefit from the resurging tech sector could find them encouraging picks:
Amplify Transformational Data Sharing ETF (BLOK - Free Report) – Up 10.5%
This fund is actively managed, providing investors global exposure to a basket of the leading companies engaged in the development and utilization of blockchain technologies. It has AUM of $1 billion in its asset base and trades in an average daily volume of 1.2 million shares. The product holds a basket of 55 stocks with American firms dominating about 56.8% of the portfolio, followed by Asia Pacific (36.8%). The ETF has an expense ratio of 0.71% (read: 5 Best-Performing Stocks of the Top ETF of February).
It is an actively managed fund seeking long-term capital appreciation by investing in companies that benefit from the development of new products or services, technological improvements and advancements in scientific research. In total, the fund holds 56 securities in its basket with healthcare and information technology taking the largest share at 31.5% and 29%, respectively, while communication services and consumer discretionary round off the next two spots. The fund charges 75 bps in annual fees and trades in an average daily volume of 10.4 million shares. It has AUM of $21.4 billion.
ARK Next Generation Internet ETF (ARKW - Free Report) – Down 9.2%
It is an actively managed fund seeking long-term capital appreciation by investing in companies that benefit from the development of new products or services, technological improvements and advancements in scientific research. The fund holds 54 securities in its basket and charges 79 bps in annual fees. The product has gathered $6.9 billion in its asset base and trades in volume of 2 million shares.
This ETF offers exposure to the 50 most innovative U.S. companies at the forefront of changing our lives today, and tomorrow, by identifying the companies that are pursuing innovation, and have the potential to disrupt existing technologies and industries. It follows the S&P Kensho Moonshots Index and holds 50 stocks in its basket with genetic engineering and cyber security accounting for a double-digit exposure each. The fund has accumulated $158.8 million in its asset base since its debut last November and charges 65 bps in annual fees from investors. It trades in an average daily volume of 290,000 shares.
Invesco DWA Technology Momentum ETF (PTF - Free Report) – Up 8.8%
This fund follows the Dorsey Wright Technology Technical Leaders Index, and provides exposure to 37 companies that are showing relative strength (momentum). It is relatively illiquid and unpopular with AUM of $369.5 million and an average daily volume of 44,000 shares. The ETF charges 60 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a High risk outlook (read: 4 Best ETF Charts of Q4 Earnings).
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5 ETFs At The Forefront of Tech Rebound
After plunging for three consecutive weeks, the tech stocks staged a strong rebound with the ultra-popular tech ETF — Select Sector SPDR Technology ETF (XLK - Free Report) — jumping 3.4% on the Mar 9 trading session.
Investors rushed to the beaten down stocks in the tech sector as an outsized surge in bond yields, which led to broad sector sell-off, cooled down. Tesla (TSLA - Free Report) jumped nearly 20%, paring much of its year-to-date loss after dropping over the past couple weeks. Apple (AAPL - Free Report) rebounded earlier this week from the lowest level it hit in November. Other stocks like Roku (ROKU - Free Report) and Square (SQ - Free Report) rose by double-digit percentages each while Amazon.com (AMZN - Free Report) and Facebook each added more than 3% (read: 5 Hot Tech ETFs to Tap on Beaten Down Prices).
Additionally, the outlook for the tech sector remains solid given the global digital shift even in the post-COVID world with the acceleration in e-commerce for everything, ranging from remote working to entertainment and shopping. The rapid adoption of cloud computing, big data, Internet of Things, wearables, VR headsets, drones, virtual reality, artificial intelligence, machine learning, digital communication and 5G technology will continue to drive the sector higher.
Further, the Fed has pledged to maintain its accommodative stance and will continue to buy $120 billion in Treasury and mortgage-backed securities per month, allowing inflation to move in an average range that could rise above its 2% target without triggering a rate hike.
Moreover, technology has a solid Zacks Sector Rank, being in the top 44%, suggesting their outperformance in the coming months.
Given this, we have highlighted those ETFs that led the tech rebound on Mar 9. Investors seeking to benefit from the resurging tech sector could find them encouraging picks:
Amplify Transformational Data Sharing ETF (BLOK - Free Report) – Up 10.5%
This fund is actively managed, providing investors global exposure to a basket of the leading companies engaged in the development and utilization of blockchain technologies. It has AUM of $1 billion in its asset base and trades in an average daily volume of 1.2 million shares. The product holds a basket of 55 stocks with American firms dominating about 56.8% of the portfolio, followed by Asia Pacific (36.8%). The ETF has an expense ratio of 0.71% (read: 5 Best-Performing Stocks of the Top ETF of February).
Ark Innovation ETF (ARKK - Free Report) – Up 10.4%
It is an actively managed fund seeking long-term capital appreciation by investing in companies that benefit from the development of new products or services, technological improvements and advancements in scientific research. In total, the fund holds 56 securities in its basket with healthcare and information technology taking the largest share at 31.5% and 29%, respectively, while communication services and consumer discretionary round off the next two spots. The fund charges 75 bps in annual fees and trades in an average daily volume of 10.4 million shares. It has AUM of $21.4 billion.
ARK Next Generation Internet ETF (ARKW - Free Report) – Down 9.2%
It is an actively managed fund seeking long-term capital appreciation by investing in companies that benefit from the development of new products or services, technological improvements and advancements in scientific research. The fund holds 54 securities in its basket and charges 79 bps in annual fees. The product has gathered $6.9 billion in its asset base and trades in volume of 2 million shares.
Direxion Moonshot Innovators ETF (MOON - Free Report) – Up 8.9%
This ETF offers exposure to the 50 most innovative U.S. companies at the forefront of changing our lives today, and tomorrow, by identifying the companies that are pursuing innovation, and have the potential to disrupt existing technologies and industries. It follows the S&P Kensho Moonshots Index and holds 50 stocks in its basket with genetic engineering and cyber security accounting for a double-digit exposure each. The fund has accumulated $158.8 million in its asset base since its debut last November and charges 65 bps in annual fees from investors. It trades in an average daily volume of 290,000 shares.
Invesco DWA Technology Momentum ETF (PTF - Free Report) – Up 8.8%
This fund follows the Dorsey Wright Technology Technical Leaders Index, and provides exposure to 37 companies that are showing relative strength (momentum). It is relatively illiquid and unpopular with AUM of $369.5 million and an average daily volume of 44,000 shares. The ETF charges 60 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a High risk outlook (read: 4 Best ETF Charts of Q4 Earnings).
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>