Putting Three ETFs To Work In A Cash Hoarding Tech Sector
“As the economy starts to show signs of prosperity and tries to mend the wounds caused by the recession, the technology sector is likely to boom. For starters, the sector appears to have strong fundamentals and is relatively cheap as compared to other sectors. In fact, as a whole, the sector boasts a projected five year PEG ratio of 1.1, which indicates that value on the expected growth of the sector is prevalent. In general, a lower PEG translates to higher value because an investor would pay less for each unit of earnings growth,” Kevin Grewal Reports From The Street.
Grewal goes on to say, “Additionally, big technology companies are known to hoard cash, which makes it that much easier to expand into new businesses and hold onto competitive advantages. With excess cash, these companies are able to take on risk without being at the mercy of a tight credit market.”
“According to a recent study by the Wall Street Journal, tech giants Apple (AAPL), Oracle Corp. (ORCL), Google (GOOG) and Microsoft (MSFT), along with six other companies, have accumulated a whopping $68.5 billion in new cash over the past two years and are putting it to use,” Grewal Reports.
See more details on the story: HERE
We have put together some details on 3 ETF’s Kevin Grewal mentioned in his article to play in the Tech hoarding cash sector:
The investment (QQQQ) is a unit investment trust designed to correspond generally to the performance, before fees and expenses, of the Nasdaq-100 index. The fund holds all the stocks in the Nasdaq-100 index, which consists of the largest non-financial securities listed on the Nasdaq Stock Market. The fund issues and redeems shares of Nasdaq-100 Index Tracking Stock in multiples of 50,000 in exchange for the stocks in the Nasdaq-100 and cash.
| TOP 10 HOLDINGS ( 46.89% OF TOTAL ASSETS) |
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The investment (XLK) seeks to correspond generally to the performance, before fees and expenses, of publicly traded equities of companies in the technology economic sector. The fund typically invests at least 95% of assets in companies of the technology sector. The fund’s sector includes companies from the following industries: Internet and IT services, software, computers, peripherals, electronics, semiconductor equipment, and a variety of telecommunication products. It is nondiversified.
| TOP 10 HOLDINGS ( 62.87% OF TOTAL ASSETS) |
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The investment (SWH) seeks to diversify your investment in the software industry through a single, exchange-listed instrument representing your undivided beneficial ownership of the underlying securities. The investment holds securities traded on U.S. stock markets that, when initially selected, were issued by companies involved in the software industry. Except when a reconstitution event, distribution of securities by an underlying issuer or other event occurs, the group of companies will not change. There are currently 18 companies included in the Software HOLDRS.
| TOP 10 HOLDINGS ( 98.98% OF TOTAL ASSETS) |
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