Tech Funds Bounce Back

The second week of January saw Tech exchange-traded funds recover, regaining some of their earlier losses from the beginning of the year. This comes after a challenging period of decreased trade volumes and lower prices.

The S&P Information Technology sector displayed an impressive performance, experiencing a gain of 4.86% for the week, making it the top-performing sector. This is a significant improvement from the previous week's loss of -4.05%. Investors responded positively to this turn of events, injecting nearly $42 million into tech funds.

Further analysis of specific tech subsectors reveals an even more positive outlook. Thematic ETFs focusing on digital growth areas such as cybersecurity, cloud computing, digital infrastructure, and connectivity outperformed broader tech-focused ETFs. Cybersecurity funds saw a substantial increase of 6.47%, while digital infrastructure and connectivity funds gained 3.12%. Cloud computing funds also experienced a notable rise of 4.99%.

This rebound in tech ETFs is occurring alongside declining government bond yields. The 10-year U.S. Treasury yield decreased by 11 basis points, dropping from 4.05% to 3.94%. Additionally, the 2-year U.S. Treasury yield plunged 26 basis points, falling from 4.40% to 4.14%

As an illustration, the L&G Cyber Security UCITS ETF (ISPY) and the L&G ROBO Global Robotics and Automation UCITS ETF (ROBO) gained 6.89% and 2.53% respectively over the week.

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Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.