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5 Technology ETFs At the Forefront of October's Market Rally
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Wall Street wrapped up its best month of the year with all the three major indices closing at record highs. In fact, the S&P 500 and the Nasdaq Composite Index clinched their best months since November 2020, gaining around 7% each. The Dow Jones surged nearly 6% in October, its best monthly gain since March.
The strong rally came on the back of upbeat corporate earnings even with global supply chain concerns. Earnings from 55.9% of the S&P 500 companies reported so far are up 39.2% on 17.8% revenues with 82.1% beating EPS estimates and 73.5% beating revenue estimates.
Among the elite group of the five Big Tech players — Alphabet (GOOGL - Free Report) and Microsoft (MSFT - Free Report) are riding high, while Amazon (AMZN - Free Report) and Facebook earned $69.1 billion in earnings in the September quarter on $322.1 billion in revenues. This group’s Q3 earnings and revenues are up 32.8% and 25.1% from the year-ago period, respectively (read: Apple Revenues Disappoint First Time Since 2018: ETFs in Focus).
Additionally, rounds of upbeat data uplifted investor sentiment. U.S. consumer confidence rose in October after three straight declines while retail sales unexpectedly rose 0.7% in September, suggesting that Americans continued to spend at a solid clip despite the rising inflation. Meanwhile, consumer spending accelerated in August even as soaring demand and snarled supply chains kept inflation high. All these data helped to drive investor sentiment along with earnings strength.
While the rally has been broad-based, technology sector has been the clear winner last month. We have highlighted five ETFs that were at the forefront of the rally and will likely to outperform should the same trends prevail.
Simplify Volt Cloud and Cybersecurity Disruption ETF – Up 38.8%
This thematic investment product is actively managed and designed to concentrate on those few disruptive companies that are poised to dominate the new era of cloud technology and then enhance the concentrated exposure with options. It holds 28 securities in its basket with a double-digit allocation on the top firm. The ETF is a high-cost choice, charging 0.95% in annual fees. It has accumulated $14.7 million in its assets since its inception in late December and trades in an average daily volume of 17,000 shares.
Simplify Volt Robocar Disruption and Tech ETF (VCAR - Free Report) – Up 35.4%
This is an actively managed ETF seeking concentrated exposure to the leader of autonomous driving technology and enhancing the concentrated exposure with options. It is heavily exposed to the Tesla stock and Tesla call options at 25% share. The fund seeks to boost its performance during extreme moves in Tesla, charging investors 0.95% in annual fees. It has accumulated $2.9 million in its asset base while trades in an average daily volume of 3,000 shares (read: 6 ETFs to Ride on Tesla's Trillion-Dollar Market Cap).
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 $67.8 million since its debut in July and trades in an average daily volume of 94,000 shares. It charges 50 bps in annual fees.
VanEck Vectors Digital Transformation ETF (DAPP - Free Report) – Up 24.1%
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 $59.9 million in its asset base since its debut in April (read: Bitcoin Tops $60K: Time to Invest in Related ETFs?).
Viridi Cleaner Energy Crypto-Mining & Semiconductor ETF – Up 23.4%
RIGZ is an actively managed ETF focused on the cryptocurrency mining industry, holding 20 stocks in its basket. It has newly debuted in the space and attracted $13.9 million in its asset base in just a month. It charges 90 bps in annual fees and trades in an average daily volume of 13,000 shares.
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5 Technology ETFs At the Forefront of October's Market Rally
Wall Street wrapped up its best month of the year with all the three major indices closing at record highs. In fact, the S&P 500 and the Nasdaq Composite Index clinched their best months since November 2020, gaining around 7% each. The Dow Jones surged nearly 6% in October, its best monthly gain since March.
The strong rally came on the back of upbeat corporate earnings even with global supply chain concerns. Earnings from 55.9% of the S&P 500 companies reported so far are up 39.2% on 17.8% revenues with 82.1% beating EPS estimates and 73.5% beating revenue estimates.
Among the elite group of the five Big Tech players — Alphabet (GOOGL - Free Report) and Microsoft (MSFT - Free Report) are riding high, while Amazon (AMZN - Free Report) and Facebook earned $69.1 billion in earnings in the September quarter on $322.1 billion in revenues. This group’s Q3 earnings and revenues are up 32.8% and 25.1% from the year-ago period, respectively (read: Apple Revenues Disappoint First Time Since 2018: ETFs in Focus).
Additionally, rounds of upbeat data uplifted investor sentiment. U.S. consumer confidence rose in October after three straight declines while retail sales unexpectedly rose 0.7% in September, suggesting that Americans continued to spend at a solid clip despite the rising inflation. Meanwhile, consumer spending accelerated in August even as soaring demand and snarled supply chains kept inflation high. All these data helped to drive investor sentiment along with earnings strength.
While the rally has been broad-based, technology sector has been the clear winner last month. We have highlighted five ETFs that were at the forefront of the rally and will likely to outperform should the same trends prevail.
Simplify Volt Cloud and Cybersecurity Disruption ETF – Up 38.8%
This thematic investment product is actively managed and designed to concentrate on those few disruptive companies that are poised to dominate the new era of cloud technology and then enhance the concentrated exposure with options. It holds 28 securities in its basket with a double-digit allocation on the top firm. The ETF is a high-cost choice, charging 0.95% in annual fees. It has accumulated $14.7 million in its assets since its inception in late December and trades in an average daily volume of 17,000 shares.
Simplify Volt Robocar Disruption and Tech ETF (VCAR - Free Report) – Up 35.4%
This is an actively managed ETF seeking concentrated exposure to the leader of autonomous driving technology and enhancing the concentrated exposure with options. It is heavily exposed to the Tesla stock and Tesla call options at 25% share. The fund seeks to boost its performance during extreme moves in Tesla, charging investors 0.95% in annual fees. It has accumulated $2.9 million in its asset base while trades in an average daily volume of 3,000 shares (read: 6 ETFs to Ride on Tesla's Trillion-Dollar Market Cap).
Global X Blockchain ETF (BKCH - Free Report) – Up 28.3%
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 $67.8 million since its debut in July and trades in an average daily volume of 94,000 shares. It charges 50 bps in annual fees.
VanEck Vectors Digital Transformation ETF (DAPP - Free Report) – Up 24.1%
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 $59.9 million in its asset base since its debut in April (read: Bitcoin Tops $60K: Time to Invest in Related ETFs?).
Viridi Cleaner Energy Crypto-Mining & Semiconductor ETF – Up 23.4%
RIGZ is an actively managed ETF focused on the cryptocurrency mining industry, holding 20 stocks in its basket. It has newly debuted in the space and attracted $13.9 million in its asset base in just a month. It charges 90 bps in annual fees and trades in an average daily volume of 13,000 shares.