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Technology ETF (VGT) Hits New 52-Week High

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For investors seeking momentum, Vanguard Information Technology ETF VGT is probably on radar now. The fund just hit a 52-week high and is up roughly 30.5% from its 52-week low price of $92.95/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

VGT in Focus

VGT focuses on the technology segment of the U.S. market, holding a large basket of 373 stocks. It is a large-cap centric fund with key holdings in the Internet software & services, technology hardware & storage, system software, semiconductors, and data processing & outsourced services segments. The fund charges investors 10 basis points a year in fees and has top holdings in Apple AAPL, Alphabet (GOOGL - Free Report) and Microsoft MSFT (see: all the Technology ETFs here).

Why the Move?

The technology sector has been an area to watch lately given the slew of robust Q3 earnings reports and growing expectations of a Fed interest rate increase in December. In particular, better-than-expected earnings from Microsoft, Intel INTC and International Business Machines IBM pushed the stocks higher and spread optimism into the sector. Further, the sector is poised to benefit from rising rates as most of the tech companies have huge cash piles on their balance sheets and thus will not face any financing problem in a rising interest rate environment due to their cash reserves.

More Gains Ahead?

Currently, VGT has a Zacks ETF Rank of 1 or ‘Strong Buy’ rating with a Medium risk outlook, suggesting continued outperformance in the months ahead. Further, many of the segments that make up this ETF have a strong Zacks Industry Rank, so there is definitely some promise for those who want to ride this surging ETF a little further.

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