Large Cap Tech Stocks Continue to Throw Their Weight Around

As more confidence returns to the capital markets, it’s been large cap equities that have been throwing their weight around, particularly when it comes to tech stocks. In particular, the Nasdaq 100 (NDX) has been a Steady Eddie amid the tossing and turning of the major indexes due to the coronavirus pandemic.

Companies like Amazon and Microsoft are leading the charge for the bulls as investors are still processing the ramifications of the pandemic on the U.S. stock market. With first-quarter earnings ahead, investors may be walking on egg shells wondering what to expect.

Nonetheless, it’s been the NDX index that’s looking to make that V-shaped recovery following the coronavirus-induced sell-off.

“There are companies in the NDX that are crushing it,” CNBC’s Jim Cramer said during an episode of “Squawk on the Street.”

The NDX has already crossed its 50- and 200-day moving average with a nice bounce following the madness of March as the coronavirus sell-offs were in full throttle. Still, as of last Friday’s close, NDX is up 1% year-to-date as opposed to the S&P 500, which is down about 11%.

^NDX Chart

^NDX data by YCharts

Investors wanting a piece large cap tech action can look to the Fidelity MSCI Information Technology Index ETF (FTEC). FTEC 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.

Other ways to get broad tech exposure include the Technology Select Sector SPDR ETF (NYSEArca: XLK). XLK tries to reflect the performance of the Technology Select Sector Index, which is comprised of technology and telecom sector of the S&P 500.

Working the Large Cap Over Small Cap Angle

As large caps continue their reign in equity funds, for investors looking for continued upside in large cap equities over small caps, the Direxion Russell Large Over Small Cap ETF (NYSEArca: RWLS) offers them the ability to benefit not only from large cap equities potentially performing well, but from their outperformance compared to their small cap brethren.

RWLS Fund Facts:

  • The Russell 1000®/Russell 2000® 150/50 Net Spread Index (R1R2NC) measures the performance of a portfolio that has 150% long exposure to the Russell 1000® Index (the “Long Component”) and 50% short exposure to the Russell 2000® Index (the “Short Component”).
  • On a monthly basis, the Index will rebalance such that the weight of the Long Component is equal to 150% and the weight of the Short Component is equal to 50% of the Index value.
  • In tracking the Index, the Fund seeks to provide a vehicle for investors looking to efficiently express a large-capitalization over small-capitalization investment view by overweighting exposure to the Long Component and shorting exposure to the Short Component.

For more market trends, visit ETF Trends.