01 Nov 5 Overlooked Tech ETFs Crushing XLK
The technology sector has been the best-performing sector this year with the ultra-popular Select Sector SPDR Technology ETF XLK gaining 26.2% in the year-to-date time frame versus the gain of 15.7% for SPDR S&P 500 SPY .
The outperformance came on the back of soaring FAANG stocks – Facebook FB , Amazon AMZN , Apple AAPL , Netflix NFLX, and Alphabet GOOGL . The emergence of cutting-edge technology such as cloud computing, big data, Internet of Things, wearables, VR headsets, drones and virtual reality devices as well as strong corporate earnings are acting as key catalysts (read: Invest in FANG Stocks With These ETFs ).
With the global economy gathering strong momentum, technology stocks will continue to outperform and are less susceptible to interest rates or deregulation. The twin tailwinds of Trump’s tax reform plan and a rising interest rate scenario are driving the stocks higher. This is because the tech titans hoard huge cash overseas and are poised to benefit the most from Trump’s proposed tax reform policy. In fact, the top five U.S. hoarders are Apple, Microsoft MSFT , Alphabet, Cisco CSCO and Oracle ORCL that hold 88% of their money overseas, according to Moody’s.