Market Overview

7 Top-Ranked Tech ETFs On Unstoppable Rallies


The technology sector is on fire given a deluge of upbeat earnings results and high hopes of the tax reform getting clearance. In particular, five technology stocks, touted as FAAMG – Facebook FB, Amazon AMZN, Apple AAPL, Microsoft MSFT, and Alphabet GOOGL – led to skyrocketing prices.

Additionally, a string of reports from other tech players like International Business Machines IBM, and Intel INTC added to the strength (read: Play IBM's Turnaround Story With These ETFs).

Total earnings from 85% of the sector's total market capitalization reported so far are up 22.4% on 9.3% higher revenues with 81.8% of the companies beating on earnings and 86.4% exceeding top-line estimates. While the beat ratios are in line with the last reported quarter, the growth rates are encouraging and higher than the recent quarters.

Trump's proposed tax reform policy, which could allow companies to bring back cash held overseas at lower rates, are fueling exceptional growth in the sector. Per Moody's, the top five U.S. hoarders are from the technology sector, namely Apple, Microsoft, Alphabet, Cisco CSCO and Oracle (ORCL, which hold 88% of their money overseas.

Further, the buzz that communications' chipmaker Broadcom (NASDAQ: AVGO) is looking to make a bid of more than $100 billion for the smartphone chip supplier Qualcomm QCOM. The combination would  mark the biggest technology acquisition in history. This has triggered further rally in the semiconductor stocks.

If these aren't enough, the sector has a solid Zacks Rank in the top 25%, suggesting robust growth prospects in the coming months (see: all the Technology ETFs here).

Given this, tech ETFs have been hitting all-time highs in recent trading sessions, easily crushing PowerShares QQQ QQQ by a wide margin in the past 10 days. Below, we have presented a bunch of those that will continue to outperform in the coming months given that these have potentially superior weighting methodologies and a solid Zacks ETF Rank #1 (Strong Buy) or 2 (Buy).

iShares PHLX Semiconductor ETF SOXX – Up 5.7%

This ETF targets the semiconductor corner of the broad tech space and follows the PHLX SOX Semiconductor Sector Index. It is a home to 30 securities charging investors 48 bps in annual fees. The fund has amassed $1.2 billion in its asset base and trades in a solid average volume of around 478,000 shares a day. It has a Zacks ETF Rank #1.

VanEck Vectors Semiconductor ETF SMH – Up 4.6%

This fund provides exposure to 26 securities by tracking the MVIS US Listed Semiconductor 25 Index. The product has managed assets worth $989.6 million and charges 36 bps in annual fees and expenses. It is heavily traded with a volume of around 3.2 million shares per day and has a Zacks ETF Rank #1.

iShares Dow Jones US Technology ETF IYW – Up 4.6%

This ETF also offers broad exposure to technology stocks by tracking the Dow Jones U.S. Technology Index and holds 142 stocks in its basket. The fund has AUM of more than $4 billion and charges 44 bps in fees and expenses. It has a Zacks ETF Rank #1 (read: 5 Red Hot Tech Stocks That Sent S&P 500 ETF Higher).

Vanguard Information Technology ETF VGT – Up 4.2%

This fund targets the broad technology sector and follows the MSCI US Investable Market Information Technology 25/50 Index. It holds 361 stocks in its basket with AUM of $16.2 billion. VGT is the low choice in the space, charging just 10 bps in annual fees while volume is good at nearly 465,000 shares a day. The product has a Zacks ETF Rank #2.

iShares North American Tech ETF IGM – Up 4.2%

This ETF tracks the S&P North American Technology Sector Index, giving investors exposure to 283 electronics, computer software and hardware, and informational technology companies. The fund has AUM of $1.3 billion and charges 48 bps in annual fees. It trades in a light volume of nearly 28,000 shares in hand a day and has a Zacks ETF Rank #2 (read: Tech ETFs to Soar on Microsoft's Blockbuster Earnings Beat).

MSCI Information Technology Index ETF FTEC – Up 4.2%

This fund is home to 358 technology stocks with AUM of $1.3 billion. It follows the MSCI USA IMI Information Technology Index. The ETF has 0.08% in expense ratio while volume is good at 191,000 shares a day. It has a Zacks ETF Rank #2.

Select Sector SPDR Technology ETF XLK – Up 4%

XLK is the ultra-popular technology ETF with AUM of $19.1 billion and average daily volume of 10.2 million shares. It follows the Technology Select Sector Index and holds a basket of 72 stocks. The fund charges 14 bps in annual fees from investors and has a Zacks ETF Rank #2 (read: Top ETF Stories of October 2017).

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Cisco Systems, Inc. (NASDAQ: CSCO): Free Stock Analysis Report
International Business Machines Corporation (NYSE: IBM): Free Stock Analysis Report, Inc. (NASDAQ: AMZN): Free Stock Analysis Report
Facebook, Inc. (NASDAQ: FB): Free Stock Analysis Report
Alphabet Inc. (NASDAQ: GOOGL): Free Stock Analysis Report
QUALCOMM Incorporated (NASDAQ: QCOM): Free Stock Analysis Report
Apple Inc. (NASDAQ: AAPL): Free Stock Analysis Report
Microsoft Corporation (NASDAQ: MSFT): Free Stock Analysis Report
SPDR-TECH SELS (ETF:XLK): ETF Research Reports
NASDAQ-100 SHRS (NASDAQ: QQQ): ETF Research Reports
FID-INFOTEC (FTEC): ETF Research Reports
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The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

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