The ALPS Disruptive Technologies ETF (DTEC) fell 4.76% last month, creating an attractive entry point for investors looking to add growthier names to their portfolios.
DTEC trailed the Morningstar Global Markets Index (MSGMUSDN) last month as markets fell amid renewed uncertainty surrounding rising inflation and recession fears that continue to grip the markets. DTEC’s larger relative allocation to the Information Technology sector led to the bulk of the underperformance vs. MSGMUSDN in August as the risk-off trade gained momentum. DTEC has a ~40% higher weighting to the technology sector compared to MSGMUSDN, ALPS wrote in a recent insight.
DTEC covers ten different themes within the tech sector, including healthcare innovation, the internet of things, clean energy and smart grid, cloud computing, data and analytics, fintech, robotics, AI, cybersecurity, 3D printing, and mobile payments. The index selects ten companies from each theme according to a proprietary model and equally weights each security. This effectively gives each theme and each company equal representation.
Cybersecurity was the leader in August among DTEC’s ten disruptive technology themes and the only theme in the green, while 3D Printing was the laggard, falling -11.40%. Proto Labs Inc. (PRLB, 0.82% weight as of August 31) dragged down the 3D Printing theme after missing analyst sales estimates in Q2, leading to a -21.46% decline this month, according to ALPS.
Avast PLC (AVST LN, 1.40% weight in DTEC as of August 31), a Cybersecurity name, was the top performer in DTEC in August, gaining 44.69% after the company received good news from the UK antitrust authorities on its acquisition by fellow DTEC Cybersecurity name, NortonLifeLock Inc. (NLOK, 0.97% weight as of August 31).
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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