Technology ETF (XNTK) Hits New 52-Week High

For investors seeking momentum, SPDR NYSE Technology ETF XNTK is probably on radar. The fund just hit a 52-week high, and is up about 60% from its 52-week low price of $61.25/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

XNTK in Focus    

This product provides exposure to purely electronics-based technology companies. It has key holdings in semiconductors, Internet & direct marketing retail, application software and systems software. The product charges 35 basis points in fees per year (see: all the Technology ETFs here).

Why the Move?

The technology corner of the broad U.S. stock market has been an area to watch lately given its outperformance so far this year. The sector has emerged as a winner in the 100 days since the World Health Organization declared COVID-19 a pandemic. The solid trend is likely to continue given the arrival of the second wave of coronavirus infections in seven U.S. states. The disease will again make people stay indoors, which in turn would boost demand for cloud computing, gaming, e-sports and streaming services. Additionally, investors will continue to pile up software shares which are apparently more insulated from the impacts of the virus.

More Gains Ahead?

Currently, XNTK has a Zacks ETF Rank #3 (Hold) with a High risk outlook. Therefore, it is hard to get a handle on its future returns one way or the other. Many of the segments that make up this ETF have a strong Zacks Industry Rank, so there is definitely still some promise for those who want to ride on this surging ETF a little longer.

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SPDR NYSE Technology ETF (XNTK): ETF Research Reports
 
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