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With renewed optimism over global economic recovery and robust earnings, the technology sector is back and has been outperforming in August. This is especially true as the S&P 500 Information Technology has gained 4.4% in a month compared to a gain of 3.2% for the S&P 500 Index.
The latest FDA full approval to Pfizer (PFE - Free Report) and BioNTech's COVID-19 vaccine, which had been under emergency use authorization since December, has bolstered investors’ optimism about the economy. This will continue to boost technology spending. Meanwhile, Q2 earnings from 87.6% of the sector’s market capitalization in the S&P 500 Index are up 65.7% from the same period last year on 25.7% higher revenues, with 96.8% beating EPS estimates and 93.7% beating revenue estimates (read: ETFs to Rise on Full FDA Approval for Pfizer COVID-19 Vaccine).
The dovish stance from the Fed last week added to the strength. Though the central bank will gradually begin tapering $120 billion in monthly bond purchases by the end of the year, it is in no hurry to raise interest rates.
Further, the sector outlook remains solid given the global digital shift with the acceleration in e-commerce for everything, ranging from remote working to entertainment and shopping. The rapid adoption of cloud computing, big data, IoT, wearables, VR headsets, drones, virtual reality, AI, machine learning, digital communication and 5G technology will continue to drive the sector higher (see: all the Technology ETFs here).
Given the Fed’s remarks, some bullish analysts see a further rally of 7-10% in tech stocks through the rest of 2021. As such, investors could tap the space with the best-performing technology ETFs of August. For them, we have highlighted some that could be excellent picks for investors seeking to benefit from the current trends:
Viridi Cleaner Energy Crypto-Mining & Semiconductor ETF – Up 22.8%
It is an actively managed ETF focused on the cryptocurrency mining industry, holding 18 stocks in its basket. RIGZ has newly debuted in the space and has attracted $9.6 million in its asset base in just a month. It charges 90 bps in annual fees and trades in an average daily volume of 23,000 shares.
This fund seeks to invest in companies positioned to benefit from the increased adoption of blockchain technology, including companies in digital asset mining, blockchain & digital asset transactions, blockchain applications, blockchain & digital asset hardware, and blockchain & digital asset integration. It holds 25 stocks in its basket with double-digit allocation to the top three firms. The ETF has gathered $28.2 million since its debut a month ago and trades in an average daily volume of 55,000 shares. It charges 50 bps in annual fees (read: Thematic ETF Investing: What You Should Know).
VanEck Vectors Digital Transformation ETF (DAPP - Free Report) – Up 16.4%
This ETF aims to offer exposure to the companies that are at the forefront of the digital asset transformation, such as digital asset exchanges, payment gateways, digital asset mining operations, software services, equipment and technology or services to the digital asset operations, digital asset infrastructure businesses or companies facilitating commerce with the use of digital assets. The fund tracks the MVIS Global Digital Assets Equity Index and holds 25 securities in its basket. It charges 50 bps in annual fees and trades in an average daily volume of 35,000. DAPP has accumulated $51.9 million in its asset base since its debut in April.
Bitwise Crypto Industry Innovators ETF (BITQ - Free Report) – Up 13.7%
This fund offers exposure to the crypto economy without the complications of holding cryptoassets directly. It tracks the Bitwise Crypto Innovators 30 Index, which measures the performance of the companies involved in servicing the cryptocurrency markets, including crypto mining firms, crypto mining equipment suppliers, crypto financial services companies, or other financial institutions servicing primarily crypto-related clientele. Holding 30 stocks in its basket, the product is concentrated on the top two firms with double-digit exposure each. It charges 85 bps in annual fees from investors and trades in an average daily volume of 89,000 shares. BITQ debuted in the space this May, and has attracted $65.9 million in its asset base so far.
This ETF has attracted $397.5 million in AUM. It is designed to offer investors global exposure to sports betting and iGaming industries by tracking the Roundhill Sports Betting & iGaming Index. iGaming comprises 32.8% share while sportsbook and technology round off the next two spots with double-digit exposure each. The fund holds 42 stocks in its basket and charges 75 bps in annual fees. It trades in an average daily volume of 173,000 shares (read: Soaring Video Games Sales to Keep Boosting Gaming ETFs).
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Tech Sector Outperforms in August: 5 Best ETFs
With renewed optimism over global economic recovery and robust earnings, the technology sector is back and has been outperforming in August. This is especially true as the S&P 500 Information Technology has gained 4.4% in a month compared to a gain of 3.2% for the S&P 500 Index.
The latest FDA full approval to Pfizer (PFE - Free Report) and BioNTech's COVID-19 vaccine, which had been under emergency use authorization since December, has bolstered investors’ optimism about the economy. This will continue to boost technology spending. Meanwhile, Q2 earnings from 87.6% of the sector’s market capitalization in the S&P 500 Index are up 65.7% from the same period last year on 25.7% higher revenues, with 96.8% beating EPS estimates and 93.7% beating revenue estimates (read: ETFs to Rise on Full FDA Approval for Pfizer COVID-19 Vaccine).
The dovish stance from the Fed last week added to the strength. Though the central bank will gradually begin tapering $120 billion in monthly bond purchases by the end of the year, it is in no hurry to raise interest rates.
Further, the sector outlook remains solid given the global digital shift with the acceleration in e-commerce for everything, ranging from remote working to entertainment and shopping. The rapid adoption of cloud computing, big data, IoT, wearables, VR headsets, drones, virtual reality, AI, machine learning, digital communication and 5G technology will continue to drive the sector higher (see: all the Technology ETFs here).
Given the Fed’s remarks, some bullish analysts see a further rally of 7-10% in tech stocks through the rest of 2021. As such, investors could tap the space with the best-performing technology ETFs of August. For them, we have highlighted some that could be excellent picks for investors seeking to benefit from the current trends:
Viridi Cleaner Energy Crypto-Mining & Semiconductor ETF – Up 22.8%
It is an actively managed ETF focused on the cryptocurrency mining industry, holding 18 stocks in its basket. RIGZ has newly debuted in the space and has attracted $9.6 million in its asset base in just a month. It charges 90 bps in annual fees and trades in an average daily volume of 23,000 shares.
Global X Blockchain ETF (BKCH - Free Report) – Up 17%
This fund seeks to invest in companies positioned to benefit from the increased adoption of blockchain technology, including companies in digital asset mining, blockchain & digital asset transactions, blockchain applications, blockchain & digital asset hardware, and blockchain & digital asset integration. It holds 25 stocks in its basket with double-digit allocation to the top three firms. The ETF has gathered $28.2 million since its debut a month ago and trades in an average daily volume of 55,000 shares. It charges 50 bps in annual fees (read: Thematic ETF Investing: What You Should Know).
VanEck Vectors Digital Transformation ETF (DAPP - Free Report) – Up 16.4%
This ETF aims to offer exposure to the companies that are at the forefront of the digital asset transformation, such as digital asset exchanges, payment gateways, digital asset mining operations, software services, equipment and technology or services to the digital asset operations, digital asset infrastructure businesses or companies facilitating commerce with the use of digital assets. The fund tracks the MVIS Global Digital Assets Equity Index and holds 25 securities in its basket. It charges 50 bps in annual fees and trades in an average daily volume of 35,000. DAPP has accumulated $51.9 million in its asset base since its debut in April.
Bitwise Crypto Industry Innovators ETF (BITQ - Free Report) – Up 13.7%
This fund offers exposure to the crypto economy without the complications of holding cryptoassets directly. It tracks the Bitwise Crypto Innovators 30 Index, which measures the performance of the companies involved in servicing the cryptocurrency markets, including crypto mining firms, crypto mining equipment suppliers, crypto financial services companies, or other financial institutions servicing primarily crypto-related clientele. Holding 30 stocks in its basket, the product is concentrated on the top two firms with double-digit exposure each. It charges 85 bps in annual fees from investors and trades in an average daily volume of 89,000 shares. BITQ debuted in the space this May, and has attracted $65.9 million in its asset base so far.
Roundhill Sports Betting & iGaming ETF (BETZ - Free Report) – Up 13.5%
This ETF has attracted $397.5 million in AUM. It is designed to offer investors global exposure to sports betting and iGaming industries by tracking the Roundhill Sports Betting & iGaming Index. iGaming comprises 32.8% share while sportsbook and technology round off the next two spots with double-digit exposure each. The fund holds 42 stocks in its basket and charges 75 bps in annual fees. It trades in an average daily volume of 173,000 shares (read: Soaring Video Games Sales to Keep Boosting Gaming ETFs).