Best Tech ETFs For August As Sector Drives Growth In Markets
The markets continue to rally with the help of excess liquidity pumped in by the Fed, as well as potential fiscal boosts coming. Technology stocks have continuously been the frontrunner this year, driving markets higher. Some of the bigger names have even posted better results during the pandemic, resulting in their stock prices reaching an all-time high. Tech ETFs have also been a blessing for investors as they continue to receive inflows over the period. Economic indicators present a mixed picture with no clear indication of how the economy will evolve from this pandemic. Unemployment levels continue to be at a high level, while housing indicators have shown some positive signs. Our deep learning algorithms paired with our Artificial Intelligence (“AI”) technology have identified one “Neutral” ETF, 4 “Unattractive” ETFs, and one “Top Short”. We have also highlighted a few unrated tech ETFs for our readers. Detailed analysis below.
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Technology Select Sector SPDR Fund (XLK)
Technology Select Sector SPDR Fund is the first fund on our list and has been identified as a “Neutral” ETF. With an AUM of $30.745 billion, the fund has been consistently witnessing inflows this year. In the last one week, there has been a flow of $0.069 billion and the fund saw a 90-day inflow of 0.527 billion. The net expense ratio of the fund is at a level of 0.13%. While the fund has been consistently rising in the last few months, our deep learning algorithm is neutral to the prospects of this ETF.
VanEck Vectors Semiconductor ETF (SMH), Vanguard Information Technology ETF (VGT), iShares US Technology ETF (IYW), Invesco QQQ Trust (QQQ)
There were four “Unattractive” rated ETFs from our AI systems, VanEck Vectors Semiconductor ETF (SMH), Vanguard Information Technology ETF (VGT), iShares US Technology ETF (IYW), Invesco QQQ Trust (QQQ). These ETFs have been receiving funds in the past 90 days with the value of these flows being $0.503 billion, $1.666 billion, $0.084 billion, and $2.441 billion respectively against an AUM of $2.048 billion, $31.714 billion, $5.408 billion, and $111.440 billion. 1-Week Fund Flow has been mixed with VanEck Vectors Semiconductor ETF and Vanguard Information Technology ETF receiving small inflows worth $0.017 billion and 0.002 billion respectively. iShares US Technology ETF and Invesco QQQ Trust saw funds worth $0.028 billion and $0.821 billion flowing out respectively. Net expense ratios for VanEck Vectors Semiconductor ETF and iShares US Technology ETF are higher at 0.35% and 0.44% while that of Vanguard Information Technology ETF and Invesco QQQ Trust are 0.1% and 0.2% respectively. The stocks are up by almost 60%, 50%, 50%, and 50% respectively in the last one year and it could be the higher valuations that have triggered an “Unattractive” rating for these funds.
iShares PHLX Semiconductor ETF (SOXX)
iShares PHLX Semiconductor ETF has been given a rating of “Top Short” by our AI systems. With an AUM of $3.029 billion, the fund received inflows worth $0.002 billion and $0.283 billion in the last 1-week and 90-day period. The fund has most of its holdings within the semiconductor space and has managed to generate a return of 55% in the last year. In addition to high valuation, the fund can be considered as expensive since the net expense ratio stands at 0.48%. All these attributes make it a candidate for top short in our list of tech ETFs.
These are also a few ETFs within the technology sector that have been unrated. Some of these have been mentioned below.
ETFMG Prime Cyber Security ETF (HACK)
ETFMG Prime Cyber Security ETF, a fund that is invested in a wide range of companies within the technology sector is already up 18% this year. The fund has a high net expense ratio of 0.64% and this is one of the reasons why investors have been withdrawing funds. The 30-Day Fund Flow and 90-Day Fund Flow of this ETF are $0.016 billion and $0.020 billion.
iShares North American Tech-Software ETF (IGV)
Next on our unrated list of Tech ETFs is iShares North American Tech-Software ETF. The fund has almost 90% of its holdings in the technology industry with the remaining 10% invested in companies across the communication sector. 1-year return of the ETF has been 44% as the fund witnessed 1-Week Fund Flow and 90-Day Fund Flow of $0.176 billion and $0.656 billion against an AUM of $4.779 billion. The fund reports a net expense ratio of 0.48%.
First Trust NASDAQ Technology Dividend Index Fund (TDIV)
First Trust NASDAQ Technology Dividend Index Fund invests in the technology sector of companies that are outside of the US as well. The ETF generated a generous twelve-month trailing dividend yield of 2.20% and is up 17% in the last year. With an AUM of $1.154 billion, the 30-Day Fund Flow and 90-Day Fund Flow of the fund stands at $0.004 billion and $0.040 billion. The foray into different companies across the globes comes at a price with the net expense ratio of the fund being 0.50%.
Invesco NASDAQ Internet ETF (PNQI)
The final company in our list of unrated ETFs is Invesco NASDAQ Internet ETF. The stock has climbed by 53% in one year. The fund is equally distributed across communication, technology, and consumer cyclical sectors. In spite of having a very high net expense ratio of 0.60%, the fund has been receiving a significant amount of inflows. The fund reports 30-Day Fund Flow and 90-Day Fund Flow of $0.028 billion and $0.068 billion respectively. The AUM stands at $0.678 billion.
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