• 13 hours Institutional Movement Reinforces Bullish Sentiment In Crypto Markets
  • 1 day $100M Saudi Payment For Syria Fails To Help ‘Davos in the Desert’
  • 1 day Supply Issues Weigh On Pot Stocks As Canada Goes Legal
  • 2 days CME Bitcoin Futures Surge As Bullish Sentiment Grows Louder
  • 2 days How Do Your Savings Stack Up To The Top 1 Percent?
  • 2 days Amazon Favored To Win $10 Billion Pentagon Contract
  • 2 days American Steel Downgraded As Trade War Escalates
  • 3 days From Gold To Bitcoin: The Evolution Of Money
  • 3 days Italy Budget "Not Compatible With Commitments That Exist In The EU"
  • 3 days U.S. Deficit Defies Economic ‘Boomtime’
  • 3 days Saudi Business At Stake Over Journalist Murder Allegations
  • 4 days Trump Bails On Coal Industry Incentives
  • 4 days Google Opens Up About "Project Dragonfly"
  • 4 days Retail Sales Rebound, But Is It Enough To Post Positive Earnings?
  • 4 days Stocks Continue To Slide As Economic Fears Fester
  • 5 days Where Does The True Value Of Gold Lie?
  • 5 days Bitcoin Soars Amid Tether Drama
  • 5 days Fake Cheese, Hooters, And Big Banks: The Millennial Market Hitlist
  • 6 days “Enormous Piles Of Cash” Are About To Return To The Market
  • 8 days UAE Approves ICOs As Equities Markets Lose Momentum
Time To Buy A Lada? Russian Auto Sales Are Booming

Time To Buy A Lada? Russian Auto Sales Are Booming

Russia’s flagship carmaker was once…

EU Weighs New Payment System With Iran To Skirt U.S. Sanctions

EU Weighs New Payment System With Iran To Skirt U.S. Sanctions

Demonstrating its eagerness to continue…

  1. Home
  2. Markets
  3. Other

Nasdaq Hits All-Time High As S&P 500 Flatlines

Nasdaq

About two months ago, one of stocks' biggest bulls gave a rallying call for investors to become bolder and trust growth stocks more.

Blackstone's Joseph Zilde spoke to CNBC's Futures Now where he said that investors had become overly cautious and were giving growth stocks a wide berth, yet most global market fundamentals remained in the pink of health.

Well, it appears that investors sat up and listened. Growth investing appears to be back in vogue, with the tech-heavy Nasdaq Composite (COMP) recently climbing to a new all-time high of 7,652.

(Click to enlarge)

Source: Google

The Nasdaq Composite comprises more than 2,500 stocks that are traded on the Nasdaq Exchange.

Historically, the Nasdaq tends to have a larger share of speculative stocks than the S&P 500, including heavy-hitters like FANG stocks as well as a slew of biotech and other growth stocks.

Over time, Nasdaq Composite tends to grow faster than the broad-market S&P 500, though on the flip side it also tends to be more volatile.

The Nasdaq Composite has comfortably outperformed the S&P 500 in the year-to-date with a return of 10.9 percent vs. 3.2 percent and also over the long-term with a five-year return of 123.52 percent vs. 70.12 percent.

Nasdaq Composite (COMP) vs. S&P 500 (SPX) YTD Change

(Click to enlarge)

Source: CNN Money

Tech Rules

Unlike the S&P 500, whose membership comprises the largest companies in 11 different sectors, the Nasdaq Composite is very tech-heavy with about half of its constituents being technology companies.

And with tech fundamentals currently looking quite good with strong EBITDA and cash flow growth, the index is likely to continue taking out new highs.

(Click to enlarge)

Source: Fidelity Investments

Just like the SPDR S&P 500 ETF (SPY), which tracks the S&P 500, there are several ETFs that track the Nasdaq Composite that investors can buy. These include:

#1 Powershares QQQ ETF(QQQ)

AUM (Assets Under Management): $62.82 billion

2018 YTD Performance: 12.2 percent Related: Silver Stocks Continue To Struggle

QQQ, or Qubes of you like, is an index fund that tracks the Nasdaq 100, which in turn is made up of the largest non-financial companies listed on Nasdaq. Its internal rules skew heavily in favor of the tech sector, with nearly 60 percent of its portfolio dedicated to the Information Technology sector. Qubes is a heavily traded ETF with good volumes. The heavy exposure to tech stocks though tends to make the ETF highly volatile.

#2 Fidelity Nasdaq Composite Index ETF(ONEQ)

AUM: $1.71 billion

2018 YTD Performance:11.23 percent

If you want an index that is more representative of the Nasdaq Composite, then ONEQ makes the cut. About 80 percent of the fund's holdings are Nasdaq Composite stocks with 97 percent of the ETF's holdings being domestic companies. ONEQ is not as tech-heavy as Qubes with its portfolio consisting of tech, healthcare and consumer discretionary stocks.

If index funds are not your cup of tea, here are some top-performing ETFs that will give you good exposure to the tech sector:

#3 Vanguard Information Technology Index Fund ETFs (VGT)

AUM (Assets Under Management): $18 billion

2018 YTD Performance: 14.82 percent

VGT is a low-cost tech ETF with a low management expense ratio of just 0.1 percent. It's also a highly liquid ETF, meaning you not only get tight spreads but also get out when you want. VGT lacks exposure to Amazon and Netflix though.

#4 iShares PHLX Semiconductor ETF(SOXX)

AUM (Assets Under Management): $1.8 billion

2018 YTD Performance: 14.27 percent

Related: Facebook’s War On Propaganda

SOXX is a popular tech ETF with heavy exposure to the semiconductor sector. Some of its top holdings include Intel Corp.(NASDAQ: NVDA) Nvidia Corp.(NASDAQ:NVDA), Qualcomm Inc. (NASDAQ:QCOM) and Micron Inc. (NASDAQ:MU). The semiconductor sector tends to be highly cyclical with boom and bust cycles. This is clearly reflected in SOXX's performance.

#5 PureFunds ISE CyberSecurity ETF (HACK)

AUM (Assets Under Management): $1.56 billion

2018 YTD Performance: 21 percent

HACK is one of the better performing ETFs this year. It gives broad exposure to cybersecurity stocks, which happens to be a red-hot sector with the rapid rise in cybercrime.

By Alex Kimani for Safehaven.com

More Top Reads From Safehaven.com

Back to homepage

Leave a comment

Leave a comment