The technology sector has suffered losses over the past week following the renomination of Jerome Powell as Fed Chair for the second term. The prospect of a rates hike next year is weighing on the high-growth names.
This is especially true as Powell is expected to raise interest rates next year, which is seen as a negative for the high-growth companies, amid rising inflation. The technology stocks rely on easy borrowing for superior growth and their valuations depend heavily on future earnings. As such, investors have rotated out of the technology names to the sectors poised to benefit from the recovering economy. However, the beaten down prices could be viewed as solid entry points given the holiday optimism. The dips in the ETFs such as WisdomTree Cloud Computing Fund ( WCLD Quick Quote WCLD - Free Report) , iShares Virtual Work and Life Multisector ETF ( IWFH Quick Quote IWFH - Free Report) , SPDR FactSet Innovative Technology ETF ( XITK Quick Quote XITK - Free Report) , Roundhill Streaming Services & Technology ETF , and Wedbush ETFMG Video Game Tech ETF ( GAMR Quick Quote GAMR - Free Report) appear as compelling investment options to make the most of the bullish holiday outlook (read: 5 ETFs to Buy This Holiday Season for Gift of Good Returns). Bullish Forecast
According to the Consumer Technology Association (CTA), U.S. technology spending during the 2021 holiday season (October-December) is expected to reach a
$142.5 billion, up 0.5% from last year. In fact, a record 191.3 million U.S. adults plan to purchase technology as a gift this holiday season. Smartphones remain the hot tech product, followed by laptop/notebook computers, wearable devices, televisions, and video game consoles and tablets/e-readers. With smartphone replacement rates reaching four-plus years (reported in CTA’s Mobile and Wireless 5-Year Forecast report), smartphone interest during this holiday season is expected to be strong, with 48% of holiday tech shoppers expecting to purchase one as a gift (up from 41% in 2019). 5G phones are at the top of the smartphone-buying list, with 62% of overall holiday smartphone buyers expecting to purchase one with 5G capabilities and 29% planning to buy a foldable phone. Interest in home video game consoles is up to 45% this holiday season compared with 33% in 2019. Additionally, 71% of buyers indicate they plan to purchase at least one content-related product this season, such as a gaming, video, fitness, or audio streaming services. “Accessorizing” or expanding in-home workspaces and computing capabilities will persist into this holiday season, showcased by interest in products such as printers (29% planing purchases), desktop computers (27%) and computer monitors (25%). ETFs to Buy WisdomTree Cloud Computing Fund ( WCLD Quick Quote WCLD - Free Report) – Down 8.9% WisdomTree Cloud Computing Fund offers exposure to emerging and fast-growing U.S.-listed companies (including ADRs) that are primarily focused on cloud software and services, and follows the BVP Nasdaq Emerging Cloud Index. It holds 58 stocks in its basket and charges investors 45 bps in fees per year. WisdomTree Cloud Computing Fund has amassed $1.3 billion in its asset base and trades in an average daily volume of 241,000 shares. It has a Zacks ETF Rank #2. iShares Virtual Work and Life Multisector ETF ( IWFH Quick Quote IWFH - Free Report) — Down 7.7% iShares Virtual Work and Life Multisector ETF provides access to companies at the forefront of virtual and remote working, and living innovation. It offers exposure to global companies that provide products, services and technologies empowering individuals to work remotely, and support an increasingly virtual way of life across entertainment, wellness and learning. iShares Virtual Work and Life Multisector ETF follows the NYSE FactSet Global Virtual Work and Life Index. Holding 75 stocks in its basket, iShares Virtual Work and Life Multisector ETF has accumulated $4.9 million in its asset base. It charges 47 bps in annual fees and trades in a paltry volume of 1,000 shares. SPDR FactSet Innovative Technology ETF ( XITK Quick Quote XITK - Free Report) – Down 7.6% SPDR FactSet Innovative Technology ETF seeks to provide exposure to companies with robust revenue growth that may provide leading-edge products and services. It follows the FactSet Innovative Technology Index and holds 93 stocks in its basket (read: Top-Ranked Tech ETFs to Buy on the Latest Dip). SPDR FactSet Innovative Technology ETF has an expense ratio of 0.45% and trades in an average daily volume of 7,000 shares. The product has AUM of $298.8 million. Roundhill Streaming Services & Technology ETF — Down 6.5% Roundhill Streaming Services & Technology ETF is actively managed and offers exposure to the streaming industry. The fund consists of companies from across the globe that are actively involved in the business of streaming. This classification includes (i) companies that operate direct-to-consumer streaming services including video, audio, livestreaming; and (ii) companies that create infrastructure or technology necessary to facilitate streaming. Roundhill Streaming Services & Technology ETF holds 38 stocks in its basket and charges 75 bps in annual fees. The ETF trades in an average daily volume of 13,000 shares and amassed $20.2 million in its asset base. Wedbush ETFMG Video Game Tech ETF ( GAMR Quick Quote GAMR - Free Report) — Down 5.1% Wedbush ETFMG Video Game Tech ETF provides pure-play and a diversified exposure to a dynamic intersection of technology and entertainment. It tracks the EEFund Video Game Tech Index, which measures the performance of the companies involved in the video game technology industry comprising game developers, console and chip manufacturers, and game retailers (read: Bet on These Video Gaming ETFs to Ride the Surging Sales Trend). Wedbush ETFMG Video Game Tech ETF holds 116 stocks in its basket and has amassed $108 million in its asset base. The product charges 75 bps in annual fees and trades in volume of about 7,000 shares a day, on average.