Tech’s $1 Trillion Rally Keeps on Rolling
For technology stocks, the superlatives are endless this year.
(Bloomberg) -- For technology stocks, the superlatives are endless this year. But rather than take profits and run, investors are flooding the space.
The sector is outperforming every other industry. In 17 weeks, only one has seen technology finish in the red. And more than $1 trillion in market capitalization has been added over the span of four months. Even with tech valuations at levels never seen before this bull market, the sector is seeing more interest than any other.
“Tech flows are white hot,” Steven DeSanctis, a U.S. equity strategist for Jefferies, wrote in a note to clients Sunday.
In the week ended April 26, three of the stock exchange-traded funds that attracted the most interest were tech-centric -- the Invesco QQQ Trust Series 1 which tracks the Nasdaq 100, the Technology Select Sector SPDR Fund, and the Vanguard Information Technology ETF. And while U.S. equities had more than $6 billion in net outflows last week, tech stocks saw $1.3 billion enter their coffers, according to Bank of America Merrill Lynch data, citing EPFR Global. The tech-heavy Nasdaq 100 traded little changed as of 9:58 a.m. on Monday.
Fueled in large part by a massive trade on April 23, investors poured more than $400 million into the Vanguard fund, known by its ticker VGT, last week. That amounts to the largest weekly inflow ever for the $21 billion fund. It recently overtook its State Street Corp. competitor, XLK, to become the most popular technology sector ETF on the market.
Apple Inc., which is set to report earnings on Tuesday, is VGT’s largest holding. Microsoft Corp. is the second-largest, and combined, the two companies make up roughly 30 percent of the ETF.
To contact the reporter on this story: Sarah Ponczek in New York at sponczek2@bloomberg.net
To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, James Ludden, Rachel Evans
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