The first quarter of 2022 has been dull for the technology sector. The rising benchmark 10-year Treasury note yields had put pressure on the space. However, the tech-heavy Nasdaq Composite has been recovering from the slowdown and is now out of the bear market. It gained 1.9% on Apr 4 and is sitting almost 10% from its previous record.
Strength in major technology players helped the index. Apple (
AAPL Quick Quote AAPL - Free Report) , Amazon ( AMZN Quick Quote AMZN - Free Report) , Alphabet ( GOOGL Quick Quote GOOGL - Free Report) and NVIDIA ( NVDA Quick Quote NVDA - Free Report) rose more than 2% on Apr 4. Tesla ( TSLA Quick Quote TSLA - Free Report) and Twitter ( TWTR Quick Quote TWTR - Free Report) were the major market drivers. Tesla’s shares were up around 5.6% as the company reported record deliveries for the first quarter. Meanwhile, Elon Musk has led to around 27% surge in shares of Twitter on Apr 4 as he acquired around a 9.2% of passive stake in the microblogging platform.
Investors willing to be part of the tech rally can bet on some top-ranked technology ETFs like
Vanguard Information Technology ETF ( VGT Quick Quote VGT - Free Report) , The Technology Select Sector SPDR Fund ( XLK Quick Quote XLK - Free Report) , iShares U.S. Technology ETF ( IYW Quick Quote IYW - Free Report) and First Trust NASDAQ-100-Technology Sector Index Fund ( QTEC Quick Quote QTEC - Free Report) .
Commenting on the tech rally, Sam Stovall, CFRA chief investment strategist, has said that “Again, because tech really took it on the chin in the first quarter, it ends up being sort of a relief rally for tech at this point, as well as for the other growth-oriented sectors. The Nasdaq is obviously leading the way ... really because there’s not a lot of new news to put additional pressure on the Nasdaq,” according to 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 today. 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 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.
The combination of finance and technology-led companies to innovate and build products for smooth functioning in areas like online and mobile payments, big data solutions, alternative finance and financial management. Fintechs are companies integrating the financial services value chain with technological solutions to provide advanced financial products.
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.
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 results from the chip companies increasing their production capacities to manage surging demand amid the global chip supply shortage. Technology ETFs to Keep Track of
The technology space can keep recovering in the second quarter of 2022, given its instrumental role in maintaining social-distancing norms amid the pandemic and the growing investments in the space. 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 $50.60 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 $47.58 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:
Beyond MEME, 5 ETFs to Play Latest Reddit Craze). 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 $8.63 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 $2.53 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.