By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
IndebtaIndebta
  • Home
  • News
  • Banking
  • Credit Cards
  • Loans
  • Mortgage
  • Investing
  • Markets
    • Stocks
    • Commodities
    • Crypto
    • Forex
  • Videos
  • More
    • Finance
    • Dept Management
    • Small Business
9
Notification Show More
News
Chris Hohn’s hedge fund TCI beats stock markets with 21% gain
60 minutes ago
News
US economy surpasses expectations to add 147,000 jobs
2 hours ago
News
I’m human. Are you? The quest for our online identity
3 hours ago
News
BlackRock and Schroders bought gilts during market slump
4 hours ago
News
Brussels to seek more joint debt in EU budget plan
5 hours ago
News
Copper prices surge as traders rush to beat Trump tariffs
6 hours ago
News
Gilts rally after Starmer says Reeves to remain chancellor for ‘a long time’
7 hours ago
Videos
General Catalyst CEO: An AI driven power crisis lurks
14 hours ago
Videos
How AI-Generated Influencers Are Earning Millions
14 hours ago
Aa
IndebtaIndebta
Aa
  • Banking
  • Credit Cards
  • Loans
  • Dept Management
  • Mortgage
  • Markets
  • Investing
  • Small Business
  • Videos
  • Home
  • News
  • Banking
  • Credit Cards
  • Loans
  • Mortgage
  • Investing
  • Markets
    • Stocks
    • Commodities
    • Crypto
    • Forex
  • Videos
  • More
    • Finance
    • Dept Management
    • Small Business
Follow US
Indebta > Investing > Tech-related ETFs post huge 2023 gains with boost from AI hype, but some big ones still are left with outflows
Investing

Tech-related ETFs post huge 2023 gains with boost from AI hype, but some big ones still are left with outflows

News Room
Last updated: 2023/06/02 at 5:10 PM
By News Room
Share
9 Min Read
SHARE

Hello! This week’s ETF Wrap takes a look at tech-fund demand and performance while highlighting several AI-themed ETFs that have attracted inflows this year.

Contents
The good……and the badNew ETFsWeekly ETF reads

Please send feedback and tips to christine.idzelis@marketwatch.com or isabel.wang@marketwatch.com. You can also follow me on Twitter at @cidzelis and find me on LinkedIn. Isabel Wang is on Twitter at @Isabelxwang.

Sign up here for our weekly ETF Wrap.

Technology stocks are booming this year after 2022’s steep selloff, but investors in exchange-traded funds aren’t racing across the board for exposure to the sector despite massive returns propelled in part from recent excitement around artificial intelligence.

The S&P 500’s information-technology sector gained 9.3% in May, bringing its year-to-date rise to 33.3%, according to FactSet data. 

Meanwhile, this year’s flow of capital throughout the tech sector has “puzzled” Todd Sohn, an ETF strategist at Strategas who in a note this week highlighted outflows from two large ETFs: the Technology Select Sector SPDR Fund
XLK,
+0.57%,
which tracks an index of tech stocks in the S&P 500, and the Invesco QQQ Trust
QQQ,
+0.75%,
which gives investors exposure to the tech-heavy Nasdaq-100 index.

“It’s strange,” Sohn said by phone. “There’s a lack of embrace towards the tech move.”

Shares of both ETFs have skyrocketed more than 30% this year, after tanking in 2022. Sohn finds year-to-date outflows from the Invesco QQQ Trust “odd” as its big gains have come “without a true scent of herding behavior” even if investors are flocking to the smaller, cheaper version of the fund — the Invesco Nasdaq 100 ETF— for tech exposure, according to his note.

Also, the Technology Select Sector SPDR Fund
XLK,
+0.57%
is a “main way to play” tech stocks, but ETF investors seem to still have “some skepticism” about the U.S. equities market’s recovery from last year’s brutal selloff, Sohn said by phone. 

So far in 2023, the ETF, which has $48 billion of assets under management, has seen about $2.5 billion of outflows despite soaring 32% this year through May, FactSet data show. And investors have pulled about $1.8 billion from the Invesco QQQ Trust in 2023, even as the ETF has surged 30.7% in the first five months of the year. 

Meanwhile, the ProShares UltraPro Short QQQ
SQQQ,
-2.16%,
which traders may use to make single-day bets against the Nasdaq-100, saw $329 million of inflows over the past month to bring this year’s total to $4.4 billion, FactSet data show. 

Read: ‘Won’t get fooled again’? Nasdaq jumped more than 10% in January. Here’s what history shows happens next to the tech-heavy index.

Still, investors this year have poured $3.1 billion into the Invesco Nasdaq 100 ETF
QQQM,
+0.77%,
a fund that launched in October 2020 and has around $11 billion of assets under management, according to FactSet data. The fund remains dwarfed by the giant Invesco QQQ Trust, which launched in 1999 and now has around $188 billion of assets under management.

While the Invesco Nasdaq 100 ETF was designed for long-term investors seeking exposure to large-cap growth stocks, flows in and out of the bigger Invesco QQQ Trust can be “very noisy” as the fund tends to be actively traded by investors who may, for example, be using it as a hedging tool, said Ryan McCormack, senior factor and core equity ETF strategist at Invesco, in a phone interview.

The smaller Invesco Nasdaq 100 ETF has posted returns similar to those of the Invesco QQQ Trust, but its expense ratio of 0.15% is five basis points cheaper, according to FactSet data. 

Tech-related stocks have jumped this year after a bruising 2022 provided investors an entry point at lower valuations, with AI-related enthusiasm over the past couple weeks sending shares of companies such as chip maker Nvidia Corp.
NVDA,
-1.11%
and Marvell Technology Inc.
MRVL,
-1.51%
even higher, said McCormack. Both companies are in the Nasdaq 100. 

See: Marvell stock soars after upbeat earnings outlook, projection that AI revenue will double this year

Investors concerned about excessive exposure to megacap companies, like Nvidia or Microsoft Corp.
MSFT,
+0.85%,
because of their heavy weightings in popular benchmarks such as the S&P 500
SPX,
+1.45%
and Nasdaq 100
NDX,
+0.73%,
may turn to an equal-weighted index to help diversify their tech exposure, according to Sohn. 

For example, investors have added $545 million so far this year to the Invesco S&P 500 Equal Weight Technology ETF
RYT,
+0.74%,
whose shares have risen 15.1% over the first five months of 2023, FactSet data show.

AI-themed ETFs

Meanwhile, some investors have been putting money to work in ETFs targeting artificial intelligence as an investment theme, including the recently launched and actively managed Roundhill Generative AI and Technology ETF
CHAT,
+0.21%.
 

In other examples, the Global X Robotics & Artificial Intelligence ETF
BOTZ,
+1.44%,
iShares Robotics and Artificial Intelligence Multisector ETF
IRBO,
+1.21%,
First Trust Nasdaq Artificial intelligence & Robotics ETF
ROBT,
+1.34%,
WisdomTree Artificial Intelligence and Innovation Fund
WTAI,
+0.11%
and ROBO Global Artificial Intelligence ETF
THNQ,
+1.62%
are funds tracking indexes that provide AI exposure. They all have attracted inflows so far this year, including over the past month, FactSet data show.

“FAANG and friends” are benefiting from the AI hype, said Matthew Tuttle, chief executive officer and chief investment officer at Tuttle Capital Management, in a phone interview, referring to the acronym commonly used for a group of stocks including Facebook parent Meta Platforms Inc.
META,
,
Apple Inc.
AAPL,
+0.48%,
Amazon.com Inc.
AMZN,
+1.21%,
Netflix Inc.
NFLX,
-0.66%
and Google parent Alphabet Inc.
GOOGL,
+0.77%
 

Tuttle said he’s not chasing AI exposure at “extended” stock prices, but that Advanced Micro Devices Inc.
AMD,
-1.35%
was among the companies he was watching for buying opportunities should valuations come back down to levels where shares may find support for a potential bounce.

“FOMO is not a great investment strategy,” he said.

As usual, here’s your look at the top- and bottom-performing ETFs over the past week through Wednesday, according to FactSet data.

The good…

Top Performers

%Performance

VanEck Semiconductor ETF
SMH,
-0.25%
11.6

iShares Semiconductor ETF
SOXX,
-0.24%
10.6

iShares Expanded Tech-Software Sector ETF
IGV,
+0.65%
6.4

iShares U.S. Technology ETF
IYW,
+0.64%
6.2

Fidelity MSCI Information Technology Index ETF
FTEC,
+0.77%
6.0

Source: FactSet data through Wednesday, May 31. Start date May 24. Excludes ETNs and leveraged products. Includes NYSE, Nasdaq and Cboe traded ETFs of $500 million or greater.

…and the bad

Bottom Performers

%Performance

United States Natural Gas Fund LP
UNG,
+0.67%
-12.2

VanEck Oil Services ETF
OIH,
+5.12%
-7.9

United States Oil Fund LP
USO,
+2.56%
-7.7

iShares U.S. Oil & Gas Exploration & Production ETF
IEO,
+3.49%
-5.6

Alerian MLP ETF
AMLP,
+1.85%
-5.0

Source: FactSet data

New ETFs

Allianz Investment Management announced on Thursday the launch of the AllianzIM U.S. Large Cap Buffer10 Jun ETF
JUNT,
+1.09%
and AllianzIM U.S. Large Cap Buffer20 Jun ETF
JUNW,
+0.54%,
funds that provide “a downside buffer” of 10% or 20% against market drops while offering “upside potential of the SPDR S&P 500 ETF Trust
SPY,
+1.45%
up to a stated cap.”

Weekly ETF reads



Read the full article here

News Room June 2, 2023 June 2, 2023
Share this Article
Facebook Twitter Copy Link Print
Leave a comment Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Finance Weekly Newsletter

Join now for the latest news, tips, and analysis about personal finance, credit cards, dept management, and many more from our experts.
Join Now
Chris Hohn’s hedge fund TCI beats stock markets with 21% gain

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects…

US economy surpasses expectations to add 147,000 jobs

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects…

I’m human. Are you? The quest for our online identity

Stay informed with free updatesSimply sign up to the Technology myFT Digest…

BlackRock and Schroders bought gilts during market slump

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects…

Brussels to seek more joint debt in EU budget plan

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects…

- Advertisement -
Ad imageAd image

You Might Also Like

Investing

Nursing Home Stocks Could Suffer from this Medicaid Spending Remedy

By News Room
Investing

Bitcoin Drops Below $90,000 Again. What Could Move It Next.

By News Room
Investing

These Stocks Are Moving the Most Today: Marvell, Nvidia, Broadcom, GM, Tesla, MongoDB, Burlington, and More

By News Room
Investing

Nvidia Stock Falls as Marvell Earnings Compound AI Gloom. The Rising Risks for Chips.

By News Room
Investing

This analyst says Tesla deliveries will be 16% below expectations. Musk is part of the problem.

By News Room
Investing

BP CEO was awarded no bonus pay from oil giant’s financial performance

By News Room
Investing

Shares of Starlink’s European competitor have tripled. CEO says it can do the job in Ukraine.

By News Room
Investing

GE Vernova Stock Rises as Analyst Flips to Upgrade After Rating Cut

By News Room
Facebook Twitter Pinterest Youtube Instagram
Company
  • Privacy Policy
  • Terms & Conditions
  • Press Release
  • Contact
  • Advertisement
More Info
  • Newsletter
  • Market Data
  • Credit Cards
  • Videos

Sign Up For Free

Subscribe to our newsletter and don't miss out on our programs, webinars and trainings.

I have read and agree to the terms & conditions
Join Community

2023 © Indepta.com. All Rights Reserved.

Welcome Back!

Sign in to your account

Lost your password?