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July was the best month for the tech-heavy Nasdaq Composite Index since April 2020. A drop in Treasury yields, which had led to a sell-off in the tech sector, and declining commodity prices brought back the lure for tech stocks.
Given this, tech ETFs led the way higher last month. First Trust SkyBridge Crypto Industry & Digital Economy ETF (CRPT - Free Report) , VanEck Vectors Digital Transformation ETF (DAPP - Free Report) , iShares Blockchain and Tech ETF (IBLC - Free Report) , Bitwise Crypto Industry Innovators ETF (BITQ - Free Report) , and Global X Blockchain ETF (BKCH - Free Report) have been the show stealers.
The 10-year yield dropped to 2.6% from 3% over the past month in the face of deteriorating economic conditions and recession fears. The world's largest economy is poised for a technical recession as GDP shrank by 0.9% in the second quarter, followed by a 1.6% decline in the first quarter. This might prompt the Fed to scale back its interest rate hiking cycle in the fall, resulting in risk-on trade.
The central bank raised interest rates by 75 bps as expected to fight inflation in the range of 2.25% and 2.5% and said it is “strongly committed to returning inflation to its 2% objective.” It also hinted that it could slow the pace of its rate hike campaign at some point (read: 5 ETFs Up in Double-Digits Post Fed's Fourth Rate Hike).
Jerome Powell stated, “it was too soon to say whether the Fed would dial down the size of its rate increases to a half-percentage point or a quarter-percentage point at its next meeting in September. But it would be appropriate to slow the pace of rate increases to assess their cumulative impact on the economy.”
Commodity prices have also fallen on recessionary fears. Further, the robust earnings reports from the chipmakers and many tech titans added to the strength.
Let’s dig into the details of the above-mentioned ETFs:
First Trust SkyBridge Crypto Industry and Digital Economy ETF (CRPT - Free Report) – Up 31.5%
First Trust SkyBridge Crypto Industry and Digital Economy ETF is designed to provide exposure to companies that SkyBridge views are driving cryptocurrency, crypto assets and digital economies-related innovation. SkyBridge identifies securities primarily via “bottom up” research focused on finding companies leading in the crypto industry ecosystem.
First Trust SkyBridge Crypto Industry holds 30 stocks in its basket and charges 85 bps in fees per year from investors. It has amassed $25.4 million in its asset base and trades in an average daily volume of 72,000 shares.
VanEck Vectors Digital Transformation ETF (DAPP - Free Report) – Up 30.3%
VanEck Vectors Digital Transformation ETF aims to offer exposure to 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. VanEck Vectors Digital Transformation ETF tracks the MVIS Global Digital Assets Equity Index and holds 24 securities in its basket.
VanEck Vectors Digital Transformation ETF charges 50 bps in annual fees and trades in an average daily volume of 1 million. DAPP has accumulated $32.6 million in its asset base.
iShares Blockchain and Tech ETF (IBLC - Free Report) – Up 30.3%
iShares Blockchain and Tech ETF seeks exposure to a wide variety of companies that are involved in the development, innovation and utilization of blockchain and crypto technologies. It follows the NYSE FactSet Global Blockchain Technologies Index and holds 33 stocks in its basket (read: Pain Ahead for Bitcoin & Related ETFs?).
NYSE FactSet Global Blockchain Technologies Index has gathered $6 million in its asset base and charges 47 bps in annual fees. It trades in a volume of 6,000 shares per day on average.
Bitwise Crypto Industry Innovators ETF (BITQ - Free Report) – Up 29.3%
Bitwise Crypto Industry Innovators ETF offers exposure to the companies leading the new crypto economy. 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 29 stocks in its basket, Bitwise Crypto Industry Innovators ETF is concentrated on the top three firms with nearly double-digit exposure each. It charges 85 bps in annual fees from investors and trades in an average daily volume of 154,000 shares. Bitwise Crypto Industry Innovators ETF has attracted $70 million in its asset base.
Global X Blockchain ETF 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. Global X Blockchain ETF holds 24 stocks in its basket with a double-digit allocation to the two top firms (read: 5 ETFs Taking Charge of the Ongoing Rally).
Global X Blockchain ETF has gathered $58.8 million in its asset base and trades in an average daily volume of 166,000 shares. It charges 50 bps in annual fees.
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Tech ETFs Make A Solid Comeback in July
July was the best month for the tech-heavy Nasdaq Composite Index since April 2020. A drop in Treasury yields, which had led to a sell-off in the tech sector, and declining commodity prices brought back the lure for tech stocks.
Given this, tech ETFs led the way higher last month. First Trust SkyBridge Crypto Industry & Digital Economy ETF (CRPT - Free Report) , VanEck Vectors Digital Transformation ETF (DAPP - Free Report) , iShares Blockchain and Tech ETF (IBLC - Free Report) , Bitwise Crypto Industry Innovators ETF (BITQ - Free Report) , and Global X Blockchain ETF (BKCH - Free Report) have been the show stealers.
The 10-year yield dropped to 2.6% from 3% over the past month in the face of deteriorating economic conditions and recession fears. The world's largest economy is poised for a technical recession as GDP shrank by 0.9% in the second quarter, followed by a 1.6% decline in the first quarter. This might prompt the Fed to scale back its interest rate hiking cycle in the fall, resulting in risk-on trade.
The central bank raised interest rates by 75 bps as expected to fight inflation in the range of 2.25% and 2.5% and said it is “strongly committed to returning inflation to its 2% objective.” It also hinted that it could slow the pace of its rate hike campaign at some point (read: 5 ETFs Up in Double-Digits Post Fed's Fourth Rate Hike).
Jerome Powell stated, “it was too soon to say whether the Fed would dial down the size of its rate increases to a half-percentage point or a quarter-percentage point at its next meeting in September. But it would be appropriate to slow the pace of rate increases to assess their cumulative impact on the economy.”
Commodity prices have also fallen on recessionary fears. Further, the robust earnings reports from the chipmakers and many tech titans added to the strength.
Let’s dig into the details of the above-mentioned ETFs:
First Trust SkyBridge Crypto Industry and Digital Economy ETF (CRPT - Free Report) – Up 31.5%
First Trust SkyBridge Crypto Industry and Digital Economy ETF is designed to provide exposure to companies that SkyBridge views are driving cryptocurrency, crypto assets and digital economies-related innovation. SkyBridge identifies securities primarily via “bottom up” research focused on finding companies leading in the crypto industry ecosystem.
First Trust SkyBridge Crypto Industry holds 30 stocks in its basket and charges 85 bps in fees per year from investors. It has amassed $25.4 million in its asset base and trades in an average daily volume of 72,000 shares.
VanEck Vectors Digital Transformation ETF (DAPP - Free Report) – Up 30.3%
VanEck Vectors Digital Transformation ETF aims to offer exposure to 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. VanEck Vectors Digital Transformation ETF tracks the MVIS Global Digital Assets Equity Index and holds 24 securities in its basket.
VanEck Vectors Digital Transformation ETF charges 50 bps in annual fees and trades in an average daily volume of 1 million. DAPP has accumulated $32.6 million in its asset base.
iShares Blockchain and Tech ETF (IBLC - Free Report) – Up 30.3%
iShares Blockchain and Tech ETF seeks exposure to a wide variety of companies that are involved in the development, innovation and utilization of blockchain and crypto technologies. It follows the NYSE FactSet Global Blockchain Technologies Index and holds 33 stocks in its basket (read: Pain Ahead for Bitcoin & Related ETFs?).
NYSE FactSet Global Blockchain Technologies Index has gathered $6 million in its asset base and charges 47 bps in annual fees. It trades in a volume of 6,000 shares per day on average.
Bitwise Crypto Industry Innovators ETF (BITQ - Free Report) – Up 29.3%
Bitwise Crypto Industry Innovators ETF offers exposure to the companies leading the new crypto economy. 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 29 stocks in its basket, Bitwise Crypto Industry Innovators ETF is concentrated on the top three firms with nearly double-digit exposure each. It charges 85 bps in annual fees from investors and trades in an average daily volume of 154,000 shares. Bitwise Crypto Industry Innovators ETF has attracted $70 million in its asset base.
Global X Blockchain ETF (BKCH - Free Report) – 25.5%
Global X Blockchain ETF 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. Global X Blockchain ETF holds 24 stocks in its basket with a double-digit allocation to the two top firms (read: 5 ETFs Taking Charge of the Ongoing Rally).
Global X Blockchain ETF has gathered $58.8 million in its asset base and trades in an average daily volume of 166,000 shares. It charges 50 bps in annual fees.