Tech stocks have continued to post strong earnings issue guidance above expectations. If you’d like to take advantage of Nasdaq’s momentum, consider adding the following 3 ETFs to your portfolio: First Trust Cloud Computing ETF (SKYY), PureFund ISE CyberSecurity ETF (HACK), and Global X Robotics & Artificial Intelligence Thematic ETF (BOTZ).From mid-February to mid-May of this year, the Nasdaq underperformed the S&P 500, Dow Jones Industrial Average, and Russell 2000. During this period, the tech index was down by 9% while the other indices were up by 6%, 8%, and down 3% respectively. Of course, this followed many months during which the Nasdaq composite was the clear leader as many tech stocks saw an incredible surge in earnings and revenue due to the pandemic.
However, the Nasdaq has resumed its leadership role since mid-May with a 13.8% gain. One major catalyst for this outperformance is the drop in longer-term rates which has correlated to lower growth expectations. This tends to lead to money moving from value, cyclical, and financial stocks into tech and growth stocks which are heavily represented in the Nasdaq. Additionally, there were concerns that tech stocks would see a decline in earnings due to elevated comps from the pandemic.
So far, this hasn’t been the case as tech stocks have continued to top earnings expectations and issue strong guidance. If you’d like to take advantage of Nasdaq’s momentum, consider adding the following 3 ETFs to your portfolio: First Trust Cloud Computing ETF (SKYY), PureFund ISE CyberSecurity ETF (HACK), and Global X Robotics & Artificial Intelligence Thematic ETF (BOTZ).