The technology sector has suffered losses over the past week, following the Fed’s latest FOMC meeting. As the Federal Reserve turned more hawkish and expectations for higher interest rates rose, investors rotated out of the high-growth technology sector.
The beaten-down prices could be viewed as solid entry points. We have highlighted five ETFs that have been in red over the past week but have a solid upside potential given the encouraging fundamentals. These include Global X Blockchain ETF BKCH, VanEck Vectors Digital Transformation ETF DAPP, Viridi Cleaner Energy Crypto-Mining & Semiconductor ETF RIGZ, Invesco DWA Technology Momentum ETF PTF and WisdomTree Cloud Computing Fund WCLD.
The Federal Reserve signaled a more aggressive unwinding of its pandemic-era monthly bond-buying, setting the stage for three interest rates hikes in 2022 to fight inflation. The move has led to a sell-off in the sector. Surging inflation and the rapid spread of the Omicron COVID-19 variant added to the chaos. This is because the technology stocks rely on easy borrowing for superior growth and their valuations depend heavily on future earnings. Rise in yields lower the present value of companies’ future earnings (read: Fed Speeds Up Taper Plans: Sector ETFs to Gain).
However, the sector outlook remains solid given the global digital shift that has accelerated e-commerce for everything, ranging from remote working to entertainment and shopping. The rapid adoption of cloud computing, big...
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