Finding the right tech ETF right now isn’t the most straightforward task for investors and advisors as rates rise and recession looms, but there are tech subsectors with some interesting opportunities. Data sciences might be one, with database company MongoDB (MDB) skyrocketing behind positive earnings news. Investors looking for a data science ETF that holds the firm might want to consider the Franklin Exponential Data ETF (XDAT).
MDB shot up earlier this week following its announcement of a profitable quarter, with a further piece of positive news that it expects the next quarter to be positive as well. Revenue beta expectations were $333.6 million for the quarter, compared to $226.9 million in the same quarter a year ago. Adjusted earnings were 23 cents per share, meanwhile, compared to a 3 cent loss a year ago.
That’s sent MDB and its cross-platform, document-oriented database program up by 20.8% over the last five days, and up 6.2% on Thursday as of writing. A bit like biotech firms pushing genetics-related innovations, data sciences may remain in demand even as the broader economy struggles, given the evergreen demand for streamlined, organized data.
While past performance is no guarantee of future performance, MDB’s projection of another positive quarter may make it an appealing option for investors in a data science ETF like XDAT. XDAT has the second-largest exposure to MDB of all ETFs, according to VettaFi, at 3.66%.
The actively-managed “Big Data” strategy launched just last year and invests in firms focused on or expected to benefit from the creation, collection, and analysis of data, as well as its applications like AI, augmented and virtual reality, software-as-a-service, and more.
Charging 50 basis points, the strategy has outperformed the ETF Database category average by almost 5%, returning 7.2% over one month. Other holdings in the ETF include Microsoft (MSFT) and Alphabet Inc. (GOOGLE) as the top two in the strategy’s portfolio by weight.
Tech has its ups and downs, and this year has certainly seen a lot of the latter. For investors looking for an interesting opportunity in tech and data sciences looking into the next year, XDAT could be an opportunity worth considering.
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