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ETF Winners Amid Tech's Roller-Coaster Ride in a Year
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A year ago, the Nasdaq Composite was at its peak, doubling since the start of the pandemic. There were plenty of opportunities in the space and immense job openings. Stock prices were also high. But today, the tech-heavy Nasdaq is off about 28%.
U.S. tech stocks have been hitting rough weather this year as surging inflation has been weighing on their lofty valuations. Though tech stocks tried to recoup losses several times, investors remain cautious about betting big on growth stocks. Hence, shares of high-growth technology companies remain in a tight spot. In total, investors have lost about $7.4 trillion of tech market cap in the past year (based on the 12-month drop in the Nasdaq), per CNBC.
Among the group of mega-cap companies, Amazon is down about 44% this year. Google parent Alphabet and Facebook parent Meta have declined about 32% and 66%, respectively. Microsoft has shed roughly $700 billion in market cap. Meta’s market cap is down by more than $600 billion in value this year.
Most of the companies are on a cost-cutting mode thanks to waning consumer demand, subdued ad spending, and inflationary pressure on wages and products. Across the tech industry, there have been total headcount cuts of more than 130,000, according to Levels.fyi, as quoted on CNBC.
Against this backdrop, below, we highlight a few tech ETFs that lost the least in the past year and efficiently beat the Nasdaq.
ETFs in Focus
ProShares S&P Technology Dividend Aristocrats ETF (TDV - Free Report) – Down 7.4% Past Year
It is the only ETF focusing on the S&P Technology Dividend Aristocrats — well-established, technology-related companies that have consistently hiked their dividends for at least seven years. Data Processing & Outsourced Services (23%) and Semiconductors (18.54%) are two different industries. The fund charges 45 bps in fees.
First Trust NASDAQ Technology Dividend Index Fund (TDIV - Free Report) – Down 13.8%
The underlying NASDAQ Technology Dividend Index includes up to 100 Technology and Telecommunications companies that pay a regular or common dividend. Semiconductors & Semiconductor Equipment (38.38%), Software (14.55%), Technology Hardware, Storage & Peripherals (12.39%) and IT Services (10.97%) have double-digit weights in the fund. The fund charges 50 bps and yields 2.41% annually.
The underlying S&P Kensho Future Security Index comprises U.S.-listed equity securities of companies domiciled across developed and emerging markets worldwide that are included in the Future Security sector. The fund charges 45 bps.
The fund looks to track an index that is designed to capture companies whose products and services are driving the innovation behind future security, which includes the areas of cyber security, advanced border security, and the following areas for military application: robotics, drones and drone technologies, space technology, wearable technologies and virtual or augmented reality activities.
Invesco S&P SmallCap Information Technology ETF (PSCT - Free Report) – Down 16%
The underlying S&P SmallCap 600 Capped Information Technology Index measures the overall performance of common stocks of U.S. information technology companies. Electric equipment (32.76%), semiconductor (27.04%) and software (18.71%) take the top three spots in the fund. The fund charges 29 bps in fees.
The underlying S&P 500 Equal Weight Information Technology Index equally weights stocks in the information technology sector of the S&P 500 Index. Semiconductor (27.56%), IT services (24.58%) and Software (21.97%) are top three industries of the fund. The fund charges 40 bps in fees.
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ETF Winners Amid Tech's Roller-Coaster Ride in a Year
A year ago, the Nasdaq Composite was at its peak, doubling since the start of the pandemic. There were plenty of opportunities in the space and immense job openings. Stock prices were also high. But today, the tech-heavy Nasdaq is off about 28%.
U.S. tech stocks have been hitting rough weather this year as surging inflation has been weighing on their lofty valuations. Though tech stocks tried to recoup losses several times, investors remain cautious about betting big on growth stocks. Hence, shares of high-growth technology companies remain in a tight spot. In total, investors have lost about $7.4 trillion of tech market cap in the past year (based on the 12-month drop in the Nasdaq), per CNBC.
Among the group of mega-cap companies, Amazon is down about 44% this year. Google parent Alphabet and Facebook parent Meta have declined about 32% and 66%, respectively. Microsoft has shed roughly $700 billion in market cap. Meta’s market cap is down by more than $600 billion in value this year.
Most of the companies are on a cost-cutting mode thanks to waning consumer demand, subdued ad spending, and inflationary pressure on wages and products. Across the tech industry, there have been total headcount cuts of more than 130,000, according to Levels.fyi, as quoted on CNBC.
Against this backdrop, below, we highlight a few tech ETFs that lost the least in the past year and efficiently beat the Nasdaq.
ETFs in Focus
ProShares S&P Technology Dividend Aristocrats ETF (TDV - Free Report) – Down 7.4% Past Year
It is the only ETF focusing on the S&P Technology Dividend Aristocrats — well-established, technology-related companies that have consistently hiked their dividends for at least seven years. Data Processing & Outsourced Services (23%) and Semiconductors (18.54%) are two different industries. The fund charges 45 bps in fees.
First Trust NASDAQ Technology Dividend Index Fund (TDIV - Free Report) – Down 13.8%
The underlying NASDAQ Technology Dividend Index includes up to 100 Technology and Telecommunications companies that pay a regular or common dividend. Semiconductors & Semiconductor Equipment (38.38%), Software (14.55%), Technology Hardware, Storage & Peripherals (12.39%) and IT Services (10.97%) have double-digit weights in the fund. The fund charges 50 bps and yields 2.41% annually.
SPDR S&P Kensho Future Security ETF (FITE - Free Report) – Down 15.4%
The underlying S&P Kensho Future Security Index comprises U.S.-listed equity securities of companies domiciled across developed and emerging markets worldwide that are included in the Future Security sector. The fund charges 45 bps.
The fund looks to track an index that is designed to capture companies whose products and services are driving the innovation behind future security, which includes the areas of cyber security, advanced border security, and the following areas for military application: robotics, drones and drone technologies, space technology, wearable technologies and virtual or augmented reality activities.
Invesco S&P SmallCap Information Technology ETF (PSCT - Free Report) – Down 16%
The underlying S&P SmallCap 600 Capped Information Technology Index measures the overall performance of common stocks of U.S. information technology companies. Electric equipment (32.76%), semiconductor (27.04%) and software (18.71%) take the top three spots in the fund. The fund charges 29 bps in fees.
Invesco S&P 500 Equal Weight Technology ETF (RYT - Free Report) – Down 17%
The underlying S&P 500 Equal Weight Information Technology Index equally weights stocks in the information technology sector of the S&P 500 Index. Semiconductor (27.56%), IT services (24.58%) and Software (21.97%) are top three industries of the fund. The fund charges 40 bps in fees.