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Bet on Top-Ranked Tech ETFs to Ride the Recent Rebound Rally
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The tech-heavy Nasdaq Composite found its way out of the bear market zone on Mar 9, after rising 3.6%. Strength in major technology players helped the index. Netflix (NFLX - Free Report) and Alphabet (GOOGL - Free Report) were up about 5%, whereas Microsoft (MSFT - Free Report) rose 4.6% and Meta Platforms was up 4.3% on Mar 9.
Investors willing to be part of the tech rally can bet on some top-ranked technology ETFs like Vanguard Information Technology ETF (VGT - Free Report) , The Technology Select Sector SPDR Fund (XLK - Free Report) , iShares U.S. Technology ETF (IYW - Free Report) and First Trust NASDAQ-100-Technology Sector Index Fund (QTEC - Free Report) .
The technology sector has suffered from rising benchmark 10-year Treasury note yields since the beginning of 2022. Growth sectors like the tech space have been feeling the pain of rising bond yields as the same decreases the relative value of future earnings, making the popular stocks seem overvalued. Tech companies also face hurdles in funding their growth and buying back stocks due to higher rates (per a CNBC article).
Meanwhile, technology has held a dominant position in the ongoing health crisis. Telemedicine and Digital Health received significant importance. Data management and storage have become integral aspects of healthcare in the present era. Thus, with the technological advancements in the healthcare sector and the rising adoption of healthcare IT solutions as well as advantages of cloud usage healthcare, the cloud computing market is on a growth trajectory.
The work-from-home model has bumped up sales of PCs, laptops and other kinds of computer peripherals. Certain other ‘new normal’ trends have also emerged amid the health crisis like work from home, increasing digital payments, growing video streaming and soaring video game sales.
The pandemic has been a blessing in disguise for the e-commerce industry as people are practicing social distancing and shopping online for all essentials, especially food items. The world is gradually moving toward digitization, increasing the dominance of technology in the financial sector. A Market Data Forecast (MDF) report also highlights the expanding opportunities in the global financial technology market, which is expected to see a CAGR of 23.4% between 2021 and 2026.
The semiconductor market has witnessed accelerated sales amid the pandemic. The strength in the space has emerged from the rising demand for consumer electronics like personal computers, laptops and smartphones.
The latest report from the Semiconductor Industry Association (SIA) highlights the same. The global semiconductor industry saw a 26.2% year-over-year surge in sales to $555.9 billion in 2021, the highest-ever annual total. A record 1.15 trillion semiconductor units were shipped in 2021. This impressive figure is a result of the chip companies increasing their production capacities to manage surging demand amid the global chip supply shortage.
Technology ETFs to Keep Track of
All the factors discussed above highlight the instrumental role that technology plays amid the ongoing COVID-19 uncertainty in aiding people to maintain safe-distancing norms. Thus, investors could consider the following ETFs:
Vanguard Information Technology ETF
Vanguard Information Technology ETF seeks to track the performance of the MSCI US Investable Market Information Technology 25/50 Index. VGT has AUM of $45.20 billion. It charges investors 10 basis points (bps) in annual fees. Vanguard Information Technology ETF currently sports a Zacks ETF Rank #1 (Strong Buy), with a Medium-risk outlook.
The Technology Select Sector SPDR Fund
The Technology Select Sector SPDR seeks to provide investment results that before expenses generally correspond with the price and yield performance of the Technology Select Sector Index. XLK has AUM of $42.66 billion. It charges investors 10 bps in annual fees. The Technology Select Sector SPDR presently flaunts a Zacks ETF Rank of 1, with a Medium-risk outlook (read: 4 Sector ETFs to Win From Fed Rate Hike).
iShares U.S. Technology ETF
iShares U.S. Technology ETF seeks to provide investment results that before expenses generally correspond with the price and yield performance of the Russell 1000 Technology RIC 22.5/45 Capped Index. IYW has AUM of $7.85 billion. It charges investors 41 bps in annual fees, as stated in the prospectus. iShares U.S. Technology ETF currently sports a Zacks ETF Rank #1, with a Medium-risk outlook.
First Trust NASDAQ-100-Technology Sector Index Fund
First Trust NASDAQ-100-Technology Sector Index Fund seeks to replicate as closely as possible, before fees and expenses, the price and yield of the NASDAQ-100 Technology Sector Index. QTEC has AUM of $2.85 billion. It charges investors 57 bps in annual fees. First Trust NASDAQ-100-Technology Sector Index Fund also flaunts a Zacks ETF Rank #1 at present, with a High-risk outlook.
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Bet on Top-Ranked Tech ETFs to Ride the Recent Rebound Rally
The tech-heavy Nasdaq Composite found its way out of the bear market zone on Mar 9, after rising 3.6%. Strength in major technology players helped the index. Netflix (NFLX - Free Report) and Alphabet (GOOGL - Free Report) were up about 5%, whereas Microsoft (MSFT - Free Report) rose 4.6% and Meta Platforms was up 4.3% on Mar 9.
Investors willing to be part of the tech rally can bet on some top-ranked technology ETFs like Vanguard Information Technology ETF (VGT - Free Report) , The Technology Select Sector SPDR Fund (XLK - Free Report) , iShares U.S. Technology ETF (IYW - Free Report) and First Trust NASDAQ-100-Technology Sector Index Fund (QTEC - Free Report) .
The technology sector has suffered from rising benchmark 10-year Treasury note yields since the beginning of 2022. Growth sectors like the tech space have been feeling the pain of rising bond yields as the same decreases the relative value of future earnings, making the popular stocks seem overvalued. Tech companies also face hurdles in funding their growth and buying back stocks due to higher rates (per a CNBC article).
Meanwhile, technology has held a dominant position in the ongoing health crisis. Telemedicine and Digital Health received significant importance. Data management and storage have become integral aspects of healthcare in the present era. Thus, with the technological advancements in the healthcare sector and the rising adoption of healthcare IT solutions as well as advantages of cloud usage healthcare, the cloud computing market is on a growth trajectory.
The work-from-home model has bumped up sales of PCs, laptops and other kinds of computer peripherals. Certain other ‘new normal’ trends have also emerged amid the health crisis like work from home, increasing digital payments, growing video streaming and soaring video game sales.
The pandemic has been a blessing in disguise for the e-commerce industry as people are practicing social distancing and shopping online for all essentials, especially food items. The world is gradually moving toward digitization, increasing the dominance of technology in the financial sector. A Market Data Forecast (MDF) report also highlights the expanding opportunities in the global financial technology market, which is expected to see a CAGR of 23.4% between 2021 and 2026.
The semiconductor market has witnessed accelerated sales amid the pandemic. The strength in the space has emerged from the rising demand for consumer electronics like personal computers, laptops and smartphones.
The latest report from the Semiconductor Industry Association (SIA) highlights the same. The global semiconductor industry saw a 26.2% year-over-year surge in sales to $555.9 billion in 2021, the highest-ever annual total. A record 1.15 trillion semiconductor units were shipped in 2021. This impressive figure is a result of the chip companies increasing their production capacities to manage surging demand amid the global chip supply shortage.
Technology ETFs to Keep Track of
All the factors discussed above highlight the instrumental role that technology plays amid the ongoing COVID-19 uncertainty in aiding people to maintain safe-distancing norms. Thus, investors could consider the following ETFs:
Vanguard Information Technology ETF
Vanguard Information Technology ETF seeks to track the performance of the MSCI US Investable Market Information Technology 25/50 Index. VGT has AUM of $45.20 billion. It charges investors 10 basis points (bps) in annual fees. Vanguard Information Technology ETF currently sports a Zacks ETF Rank #1 (Strong Buy), with a Medium-risk outlook.
The Technology Select Sector SPDR Fund
The Technology Select Sector SPDR seeks to provide investment results that before expenses generally correspond with the price and yield performance of the Technology Select Sector Index. XLK has AUM of $42.66 billion. It charges investors 10 bps in annual fees. The Technology Select Sector SPDR presently flaunts a Zacks ETF Rank of 1, with a Medium-risk outlook (read: 4 Sector ETFs to Win From Fed Rate Hike).
iShares U.S. Technology ETF
iShares U.S. Technology ETF seeks to provide investment results that before expenses generally correspond with the price and yield performance of the Russell 1000 Technology RIC 22.5/45 Capped Index. IYW has AUM of $7.85 billion. It charges investors 41 bps in annual fees, as stated in the prospectus. iShares U.S. Technology ETF currently sports a Zacks ETF Rank #1, with a Medium-risk outlook.
First Trust NASDAQ-100-Technology Sector Index Fund
First Trust NASDAQ-100-Technology Sector Index Fund seeks to replicate as closely as possible, before fees and expenses, the price and yield of the NASDAQ-100 Technology Sector Index. QTEC has AUM of $2.85 billion. It charges investors 57 bps in annual fees. First Trust NASDAQ-100-Technology Sector Index Fund also flaunts a Zacks ETF Rank #1 at present, with a High-risk outlook.