Energy and Tech are not Necessarily Oil and Water in a Fund

By Todd Rosenbluth, CFRA

Last week, CFRA’s Investment Policy Committee became more bullish on the energy and technology sectors as part of a diversified U.S. equity portfolio. Those sectors replaced the previously favored health care and financial sectors, which were simultaneously downgraded to marketweight. Investors who want to leverage our recommendations using top-rated ETFs and mutual funds have an array of choices.

CFRA has Buy or Strong Buy recommendations on 31 U.S. energy stocks, including Chevron (CVX), ConocoPhillips (COP) and Valero Energy (VLO). Investors who want a more diversified index-based approach to the sector should look to Energy Select Sector SPDR (XLE) and Vanguard Energy Index ETF (VDE). While XLE only holds large-cap stocks in the sector, VDE also includes mid- and small-cap energy stocks. For actively-minded investors, Tortoise MLP & Pipeline Fund (TORTX) is one of the various CFRA five-star rated mutual funds. CFRA likes what’s inside, including Kinder Morgan (KMI) and Williams Companies (WMB).

CFRA has Buy or Strong Buy recommendations on 61 U.S. technology stocks across an array of industries, including Apple (AAPL), Alphabet (GOOGL), Cisco Systems (CSCO) and Oracle (ORCL). Investors can look to Fidelity MSCI Information Technology (FTEC) and Technology Select Sector SPDR (XLK) for an index-based approach as both hold the previously listed large-cap tech stocks. Meanwhile, Red Oak Technology Select Fund (ROGSX) is an example of an actively-managed tech-focused mutual fund.