A shortened trading week due to the Thanksgiving holiday didn’t stop investors from heading into technology and municipal bonds, as noted in Invesco’s fund flows the past week.
Exchange traded fund (ETF) investors headed into big tech ahead of the news that a COVID-19 variant, dubbed “Omicron,” was racking South Africa. While it may seem like more luck than prescience, investors who added more tech will most likely be rewarded in the coming months should this variant force global governments to re-institute lockdowns.
If so, more reliance on technology could be the byproduct. The Pew Research Center already noted a heavier use of the internet stemming from the apex of last year’s COVID-19 scare.
ETF investors were eager to head into the Invesco NASDAQ 100 ETF (QQQM) to capitalize on big tech. QQQM is based on the NASDAQ-100 Index, which includes securities of 100 of the largest domestic and international non-financial companies listed on the Nasdaq.
At a 0.15% expense ratio, the fund can also be used as a trader’s tool like its bigger QQQ brother. As mentioned, tech continues to come into the forefront after the pandemic further stressed the need for reliance on technology.
Investors also liked accessing tech in China via the Invesco China Technology ETF (CQQQ). While the Chinese government’s wrangling of monopolies in big tech companies were the story this year, that news could be subsiding.
CQQQ is based on the FTSE China Incl A 25% Technology Capped Index. The index includes constituents of the FTSE China Index and the FTSE China A Stock Connect Index that are classified as information technology securities, including China A-shares and China B-shares.
Investors Piled Into Municipal Bonds
Adding municipal bonds could be investors playing off the trillion-dollar infrastructure bill signed into law by President Biden. It could also be tax-wary investors looking to shore up their income with tax-free munis in order to mitigate the forthcoming tax bite thanks to instances of heavier government spending like the infrastructure bill.
Either way, this could have boosted the case for more fund flows heading into the Invesco Taxable Municipal Bond ETF (BAB), which seeks to track the investment results of the ICE BofAML US Taxable Municipal Securities Plus Index. The index is designed to measure the performance of U.S. dollar-denominated taxable municipal debt publicly issued by U.S. states and territories and their political subdivisions in the U.S. market.
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