The & # 39; New Normal & # 39; In the days of COVID-19 means that an increasing number of people work from home, shop online, learn virtually and even find entertainment from the comfort of their own home. Therefore, if there is only one thing that becomes clear in 2020, it is that technology has become.
While technology stocks were not immune to the February and March sell-offs, most have made notable comebacks since hitting the 52-week low in late March. Many have shown resilience with strong second quarter gains boosting stock prices.
With that in mind, it can be complicated to choose which stocks are the most promising, since so many are now at record highs. Below we discuss the benefits of investing in technology and two ETFs that can provide a safer growth trajectory:
Why technology?
Generally speaking, engineering companies develop, manufacture, or offer technology-based services or products. The sector spans a wide range of segments from telecommunications to personal computers, semiconductors, e-commerce, software as a service, cloud computing, FinTech, online social networks, artificial intelligence, internet of things, robotics, big data and autonomous technology.
Many big tech names are listed on the Exchange and headquartered in Silicon Valley or Seattle. Giants such as Alphabet (NASDAQ :), (NASDAQ :), Apple (NASDAQ 🙂 Fa cebook (NASDAQ :), Microsoft (NASDAQ :), and NVIDIA (NASDAQ 🙂 among others led the rally in tech stocks.
Especially in the past ten years, these well-known names have strongly influenced our lives. Despite the high cost of their stocks and short-term volatility, technology companies have provided stability and growth as institutions tend to invest in stocks that are expected to grow quarter after quarter.
1. Defiance 5G Next Gen Connectivity ETF
Current price: $ 29.86
52 Week Range: $ 18.66 – $ 29.92
Expense Ratio: 0.30% per year, or $ 30 with an investment of $ 10,000
The Defiance 5G Next Gen Connectivity ETF (NYSE 🙂 primarily provides exposure to companies engaged in the development or commercialization of systems in use in 5G communications
FIVG, which tracks the investment results of BlueStarGlobal 5G Communications index includes 78 companies. The three main sectors (by weight) are Radio Access Network Tech (37.58%), Mobile Network Operators or MNOs (15.77%) and Cell Tower & Data Center REIT (14.33).
The top ten holdings make up nearly 40% of FIVG's total net assets, which amount to $ 478 million. The fund's five largest companies are Qualcomm (NASDAQ :), NXP Semiconductors (NASDAQ :), Ericsson (NASDAQ :), Analog Devices (NASDAQ 🙂 and Xilinx (NASDAQ :).
The world is gearing up for the 5G revolution, which is likely to boost productivity and growth. This new technology will be central to the infrastructure and data economy that will be used to develop smart cities. It will also reduce the slowdown or latency of mobile applications, which should have a positive impact on the development of online gaming and self-driving cars.
Year-to-date, the fund is up about 13%. In mid-August, it hit a record high of $ 29.92. The fund may come under pressure from taking short-term gains which would provide better value for long-term investors. We would consider buying about $ 27.5 or less.
2. ETFMG Prime Cyber ??Security ETF
Current price: $ 50.58
52 Week Range: $ 29.02 – $ 50.63
Expense Ratio: 0.60% per year, or $ 60 with an investment of $ 10,000
The ETFMG Prime Cyber ??Security ETF (NYSE 🙂 is a portfolio of companies providing cybersecurity solutions that include hardware, software, consulting and services for defense against cybercrime.
HACK, which tracks the Prime Cyber ??Defense Index includes 57 companies. The sector allocation (by weighting) is system software (59.7%), IT consultancy and other services (10.6%), communication equipment (9.4%), application software (7.7%), internet services and infrastructure (5, 6%), Aeronautics and Defense (5.4%) and Electronic Equipment and Instruments (0.8%).
The top ten holdings make up more than 30% of HACK's assets under management, which is approximately $ 1.5 billion. The top five companies are Sailpoint Technologies (NYSE :), Cloudflare (NYSE :), Splunk (NASDAQ :), Cisco (NASDAQ :), and Liveramp (NYSE :).
Most analysts agree that the cybersecurity market is booming. As businesses and individuals need to keep digital data and their cyber environments secure, many newcomers and more established security companies have gained prominence.
So far in the year, HACK is up more than 19%. It hit an all-time high on August 27 and the price is hovering at $ 50.5. Long-term investors researching cyber security stocks to buy may want to keep HACK on their radar. A possible drop to the $ 47.5 level or below would mean better access to the fund.
