The ALPS Disruptive Technologies ETF (DTEC) rallied 3.31% last week as technology and other growth stocks continued their momentum on easing supply constraints and commodity prices.
Since ending the first half of 2022 with the worst returns in over 50 years, stocks staged another recovery last week, with the growthiest segments of the market seeing notable rallies. Inflation and recession fears have dominated in recent weeks. However, a new narrative is emerging as investors wonder whether it’s time to start buying up stocks again, citing cheap historical valuations.
With the U.S. dollar breaking out to highs not seen since the early 2000s, imported inflation may look to cool for many growth and technology companies that source their product components from overseas manufacturers, ALPS wrote in a recent insight.
All ten of DTEC’s equally-weighted disruptive technology themes provided positive performance last week, led by cybersecurity (9.69% weight as of 6/30) and mobile payments (9.66% weight as of 6/30).
Cybersecurity names, Fortinet Inc. (FTNT, 1.08% weight as of 6/30), Okta Inc. (OKTA, 1.15% weight as of 6/30), Trend Micro Inc. (4704 JP, 1.04% weight as of 6/30), Zscaler Inc. (ZS, 1.09% weight as of 6/30), and Crowdstrike Holdings Inc. (CRWD, 1.15% weight as of 6/30) each gained over 6% last week following a bullish note from Morgan Stanley, who cited cheap valuations and durable cybersecurity spending by corporations in the back half of the year, despite macroeconomic uncertainty, according to ALPS.
DTEC’s largest out-performer last week was the mobile payments name, GMO Payment Gateway (3769 JP, 1.07% weight as of 6/30), rising nearly 17% last week on strength in the cryptocurrency market and potentially bottoming household spending figures in Japan.
Holding PagSeguro Digital Ltd. (PAGS, 0.87% weight as of 6/30) rallied nearly 7% last week as analysts remain positive on the mobile payments company with increasing cross-border travel within Brazil and the U.S., according to ALPS.
The top performer in DTEC’s Cloud Computing theme last week was Snowflake Inc. (SNOW US, 1.26% weight as of 6/30), jumping over 10% on positive analyst commentary around increasing enterprise data storage needs in the cloud. Cloud accounting software company, Xero Ltd. (XRO AU, 1.11% weight as of 6/30), gained nearly 15% last week on a Motley Fool article in Australia that cited positive analyst commentary around Xero’s increasing subscriber growth and average revenue per user (ARPU).
Other funds that offer exposure to technology equities include the ProShares S&P Technology Dividend Aristocrats ETF (TDV), the First Trust NASDAQTechnology Dividend Index Fund (TDIV), and the BlueStar Israel Technology ETF (ITEQ).
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