Somehow, some way, the U.S. economy appears on track to pull off a soft landing. Even when the Fed cut rates last month by a surprisingly large amount, significant doubts loomed. While there are still reasons for caution, as ever, last month’s jobs numbers showed continued economic health. Looking ahead, then, it may be worth considering a global tech ETF like OGIG, which has shined in recent weeks.
See more: This Small-Cap ETF Sending Buy Signal Amid Rate Cut Glow
OGIG, the ALPS O’Shares Global Internet Giants ETF, could appeal if a soft landing looms for a tech-driven U.S. economy. It combines exposure to key U.S. large caps in tech with exposure to foreign e-commerce names like MercadoLibre (MELI). The global tech ETF tracks the O’Shares Global Internet Giants Index for a 48 basis point (bps) fee.
In doing so, it has returned 15% YTD and 35.4% over the last year, per data from SS&C ALPS Advisors. Looking at ETF Database data, the strategy has returned 12.2% over the last month. Those one month, one year, and YTD returns beat both OGIG’s ETF Database Category and Factset Segment averages.
The fund looks for global internet and tech stocks, weighted by growth and quality factors. It considers attributes like monthly cash burn rate and revenue growth rate in its index. The global tech ETF selects its universe of potential investments from the 1,000 largest U.S.-listed firms. It also considers the 500 largest European, Pacific basin, and emerging market firms, respectively.
It’s that combination of domestic and foreign exposures that can help OGIG set itself apart from other large tech index ETFs. A soft landing in the U.S. does not mean that all concentration risk from big tech has been avoided. By merging big foreign and U.S. names, OGIG could differentiate portfolios from a standard tech allocation.
VettaFi LLC (“VettaFi”) is the index provider for OGIG, for which it receives an index licensing fee. However, OGIG is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of OGIG.
For more news, information, and analysis, visit the ETF Building Blocks Channel.
