Technology Stocks Are Outperforming The Market
According to information from Goldman Sachs, more than 50% of large cap mutual funds are outperforming or have outperformed the milestones set so far this year with much of this being attributed to technology stocks taking center stage. This means that tech stocks are on track for the highest rate of outperformance since 2009. Overall, the relative exposure that funds have to technology stocks has been seen as a big factor to the recent successes that many of these funds are seeing.
If you look at what a team of Goldman analysts said, their sentiment is very bullish, “Information technology, the best performing sector year to date, has been a key driver of the divergence in fund performance.”
And with 60% of large-cap value funds outpacing their benchmarks, it’s no wonder why many retail investors are beginning to target tech for solid returns. The Russell 1000 Value Index is above the 10-year average of 40% and roughly 63% of growth funds capped the Russell 1000 Growth Index. Under 40% of the main funds have outperformed the S&P 500 on a year to date basis according to Goldman’s data. But even with that, this is slightly higher than the 34% in historical rates.
If you look at the Technology Select Sector SPDR ETF, it’s up over 16% so far this year and more than twice that of the S&P’s return. The four companies leading the growth in the technology sector – Apple, Microsoft, Alphabet, and Facebook – have all recorded massive gains in 2017. With the rise in technology and innovation that many of these companies are delivering, the dawn of the tech era in the market could be hitting a fever pitch at this point. The remaining question will be, “Where are there still ‘undervalued’ stocks that have room to run and grab hold of this trend in future months and years to come?”