(C) Reuters. 4 ETFs to Buy as the Technology Sector Continues to Melt Up
The Nasdaq has grabbed the baton and is leading the market higher. If this trend continues, investors should expect the following ETFs to outperform: Renaissance IPO ETF (IPO), Global X Social Media ETF (SOCL), VanEck Vectors Semiconductor ETF (SMH), and ARK Innovation ETF (ARKK).The stock market has been quite strong over the past few weeks, as it’s managed to break out of its multi-month consolidation. One interesting change in character has been the outperformance in tech stocks since mid-May.
Since May 13, the tech-heavy Nasdaq is up by 11.5%, while the S&P 500 is up 5.3% over the same period. Of course, this follows many months of underperformance in tech stocks. Some of the catalysts for this change in behavior are that the last two earnings seasons have been quite strong for tech. Additionally, longer-term rates have also backed off which was one of the major catalysts for the rotation from growth to value.
There’s a vigorous debate about whether tech stocks are going to continue outperforming or whether value and cyclical stocks will lead the market higher as they did from November to May. Tech bulls will point to softening economic data, deceleration in leading indicators of inflation, and favorable valuations for the sector. If tech continues to outperform, then investors should consider buying the following ETFs: Renaissance IPO ETF (IPO), Global X Social Media ETF (SOCL), VanEck Vectors Semiconductor ETF (SMH), and ARK Innovation ETF (ARKK).
4 ETFs to Buy as the Technology Sector Continues to Melt Up
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