Tech has proven to be a surprisingly durable source of returns so far this year, but how should investors respond? So much of the year’s narrative has focused on concerns like rising rates or a looming recession. How long can tech resist, even as some discuss whether we may actually be in a bull market anyway? An equal-weight tech ETF with a global view could present an appealing way to get that tech exposure right now.
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That ETF, the ALPS Disruptive Technologies ETF (DTEC), offers investors a balanced, equal-weight approach to disruptive tech sectors. Rather than leaning into just one area, like, say, 3D printing, investors can balance their investments. DTEC charges 50 basis points to track the Indxx Disruptive Technologies Index with 10 total different themes. Those include areas like clean energy, cloud computing, fintech, AI, mobile payments, and more.
DTEC chooses 10 firms from each theme for a total of 100 names with no geography limits, including developed and emerging markets alike. For example, that leads to DTEC holding names like Tesla (TSLA) and Intuitive Surgical (ISRG) at about the same weight.
DTEC has returned 15.4% YTD thanks to that approach, and 8.1% over the last year overall. It’s also seen its AUM rise by about $8 million over the last month, thanks almost entirely to price influence.
Perhaps most significantly, DTEC has seen its 50-day simple moving average (SMA) rise above its 200-day SMA. That alone could indicate that it may be time to buy into the strategy. DTEC has gone beyond that, however, with its price almost $2 more than its 50-day SMA as of Monday. When prices rise above SMAs, that often indicates price momentum for a given security, though tech indicators offer no guarantee.
Altogether, DTEC offers investors an intriguing alternative to strategies like the ARK Innovation ETF (ARKK). For those looking for a strategy with a bit more internal diversification than ARKK, DTEC may be worth considering.
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