For the companies that have reported first-quarter earnings thus far in the technology sector, 78.9% have beaten EPS estimates and 71.1% beat revenue estimates. For investors who aren’t already allocated into the tech sector, there are exchange-traded funds (ETFs) to take advantage of–all with their own spin on allocation.
The search for low-cost alpha hasn’t stopped investors from pouring into the technology sector. Last week, the Nasdaq Composite hit a closing high with the help of strength from the likes of Amazon and more upside could be ahead if Apple posts strong earnings on Tuesday.
The markets were also boosted by better-than-expected first-quarter GDP numbers published by the Commerce Department. Despite a number of roadblocks heading into 2019 after a rough fourth-quarter market showing to end 2018, the U.S. economy rebounded in the first quarter this year, beating analysts’ expectations of 2.5 percent growth with a 3.2 percent growth number.
“Tech flows are white hot,” Steven DeSanctis, a U.S. equity strategist for Jefferies, wrote in a note to clients Sunday.
Here are five technology ETFs where investors can get started:
- Technology Select Sector SPDR ETF (NYSEArca: XLK): The Technology Select Sector SPDR Fund tries to reflect the performance of the Technology Select Sector Index, which is comprised of technology and telecom sector of the S&P 500. The ETF includes companies from technology hardware, storage, and peripherals; software; diversified telecommunication services; communications equipment; semiconductors and semiconductor equipment; internet software and services; IT services; electronic equipment, instruments and components; and wireless telecommunication services.
- Invesco S&P 500 Equal Weight Technology ETF (NYSEArca: RYT): The Guggenheim S&P Equal Weight Technology ETF tries to reflect the performance of the S&P 500 Equal Weight Information Technology Index, which is comprised of S&P 500 technology companies that are equally weighted.
- iShares U.S. Technology ETF (NYSEArca: IYW): The iShares U.S. Technology ETF reflects the performance of the Dow Jones U.S. Information Technology Index, which includes all tech sector picks in the Dow Jones U.S. Index. Due to the Dow Jones’ classification of information tech names, healthcare technology stocks may be included while payment technology stocks are excluded.
- First Trust Nasdaq-100 Tech Index (NasdaqGM: QTEC): The First Trust Nasdaq-100 Tech Index tries to reflect the performance of the Nasdaq-100 Technology Sector Index, which consists of companies in the Nasdaq-100 Index classified as technology according to the Industry Classification Benchmark. QTEC currently holds 34 components and more-or-less equally weights its holdings.
- Vanguard Information Technology ETF (NYSEArca: VGT): The Vanguard Information Technology ETF tries to reflect the performance of the MSCI US IMI Information Technology 25/50 Index, which includes information technology stocks in the MSCI US IMI 25/50.
For more market trends, visit ETF Trends.
