ETFs

Make the Most of the Big Tech Rally With These ETFs

Investors seem to be mostly braving their fears over the second wave of coronavirus infections on the latest updates from the technological sector. With support from the major tech players, the Nasdaq Composite index rose to a fresh record on Jun 23.

Gaining for eight straight days (longest streak since December 2019) and marking the second straight all-time closing high, the tech-heavy index rose 0.7% in yesterday’s trading session along with Dow Jones Industrial Average rising 0.5% and S&P 500’s 0.4% increase. In the ETF arena, major Nasdaq ETF like Invesco QQQ (QQQ) hit a 52-week high in yesterday’s trading session. Meanwhile, popular technology ETFs like iShares U.S. Technology ETF (IYW) and Vanguard Information Technology ETF (VGT) soared to their 52-week high level.

Tech giant Apple AAPL led the rally with 2.1% gain to its all-time high level. It was the sixth time in June that the stock closed at

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Top-Ranked Technology ETFs Soaring to All-Time Highs

The technology sector is booming and at the heart of the current market rally. It has shown strong resilience in one of the worst economic environments that the United States has ever seen.

Most of the strength is being driven by the biggest names in the sector like Facebook FB, Apple AAPL, Amazon AMZN and Microsoft MSFT thanks to the shift in consumer habits to a purely digital world with work, entertainment and shopping from home. In fact, the combined market value of the four companies is now close to $5 trillion, with Apple claiming the top spot at nearly $1.5 trillion. Only Facebook out of the four has a market cap below $1 trillion (read: Take a Bite of the Red-Hot Apple Stock With These Tech ETFs).

These big tech stocks propelled the broader stock market, especially the tech-heavy Nasdaq Composite Index, which has crossed the 10,000 milestone for

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Understanding Smart Beta ETFs’ Indexes

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Smart beta ETFs make up a small, but growing, slice of the top three index providers’ business, based on ETF assets.

At First Bridge Data, a CFRA company, index-based ETFs are split between traditional beta funds that track a market-cap-weighted index; smart beta funds that track an alternatively weighted index; and leveraged/inverse ETFs that either amplify or seek to benefit from the decline in the returns of market-cap-weighted indexes.

Smart beta funds have gained in popularity in recent years, as investors have sought to improve on the reward or reduce the risk of traditional beta funds without employing leverage. Some smart beta types include dividend, low volatility, value and multifactor; the latter combines multiple metrics in one index-based approach.

Yet smart beta remains a modest percentage of ETF assets tied to indexes from the top three index providers as demand for lower-cost traditional beta funds has been even stronger.

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Why Small-Cap ETFs & Stocks Outperformed Last Week

U.S. stocks performed well last week on optimism over a potential coronavirus vaccine and the reopening of the economy, though rising tensions between the United States and China weighed on the market. All the 50 states have lifted restrictions put in place to combat the coronavirus outbreak. The easing has started to propel demand and is likely to revive economic growth (read: Is Moderna Winning the COVID-19 Vaccine Race? ETFs to Gain).

The latest data for U.S. consumer sentiment shows that the University of Michigan’s consumer sentiment index rose to 73.7 in early May from 71.8 in April as fiscal stimulus measures “improved consumers’ finances and widespread price discounting boosted their buying attitudes.”

Additionally, Federal Reserve Chairman Jerome Powell said the central bank still has plenty of ammunition to rescue the economy from a deep slowdown, indicating a potential recovery in the second half of the year. The Fed would

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