U.S. equity markets defied expectations in 2023, with the S&P up 24% for the year. But while the stock market’s performance was good in 2023, it was especially good for large-cap tech stocks.
According to Morningstar’s Tom Lauricella and Lauren Solberg, tech stocks posted a huge year, surging 59.1% in 2023, resulting in their best performance since 2009.
“2023 turned into one of the biggest years for stock market performance in the past decade,” Lauricella and Solberg wrote. “It was especially good for the kinds of mega-cap technology stocks and other growth companies that suffered the biggest losses in the 2022 bear market.”
In particular, Nvidia Corp. (NVDA) had a great year. After its value was cut in half in 2022, the semiconductor chip designer’s stock rallied 239% during the year. Morningstar attributed the massive spike to “the emergence of artificial intelligence technologies” reshaping the tech sector.
See more: “SOXQ and PNQI Among Invesco’s Top-Performing ETFs in 2023”
Capitalize on This Surge in Tech Stocks With PTF
So, to capitalize on this surge in tech stocks, investors should consider the Invesco Dorsey Wright Technology Momentum ETF (PTF).
The fund tracks an index of at least 30 technology stocks with powerful relative strength or “momentum” characteristics. Index provider Dorsey Wright selects its securities from the Nasdaq US Benchmark Index.
As of December 29, NVDA was the fund’s third largest holding, making up 4.98% of PTF’s portfolio.
According to the fund’s prospectus, “relative strength” is a technique that aims to identify the strongest performing securities. This involves measuring factors like a security’s performance against the market over a set period or its relative strength value. The latter is derived by comparing the rate of increase of the security’s price to that of a benchmark index.
PTF rose nearly 34% over 2023, more than 9 percentage points above the S&P 500.
PTF charges 60 basis points.
For more news, information, and analysis, visit the Innovative ETFs Channel.
Originally published on ETFTrends.com on January 3, 2024.
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