Tech Pullback Signals Buying Opportunity

While the technology segment was dragging down the rest of the markets, ETF investors were quietly funneling more money into the semiconductor sector despite the sell-off.

For example, investors dumped $175 million into the VanEck Vectors Semiconductor ETF (NYSEArca: SMH) on Monday, pushing up total inflows into the ETF to $629 million since Thursday and marking the biggest three-day inflow since April, Bloomberg reports.

In comparison, the widely observed Invesco QQQ Trust (NASDAQ: QQQ) experienced eight days of withdrawals as $3.2 billion was yanked from the ETF.

The disparity between the various tech-related ETF plays reveals the diverging sentiment for some of the highest-flying tech segment and the rest of the industry at large.

Strong earnings out of the chipmakers like Advanced Micro Devices Inc., Xilinx Inc. and Taiwan Semiconductor Manufacturing Co. are bolstering the semiconductor sector outlook, helping the segment stand up against a rout in a broader tech space after the biggest three-day drop since March in response to Facebook Inc.’s user growth miss.