Technology Sector Equity

Technology sector mutual funds and ETFs primarily invest in high-tech businesses in... Technology sector mutual funds and ETFs primarily invest in high-tech businesses in the U.S. or elsewhere. These funds can be actively or passively managed, and may own, depending on their mandate, a mix of small, mid, and large capitalization stocks. Funds focused on this sector can own, produce or maintain computer or related hardware/software components, semiconductor, specialized software and related services, online services, networking and related hardware/software, and internet infrastructure. Some concentrate on a single technology industry, while others take a diversified approach. Additionally, this sector can also include dedicated technology service providers, including technology consultants. Technology mutual funds and ETFs tend to attract investors willing to take on more risk in search of higher returns. Stocks in this sector often trade at lofty valuations, as investors price in high levels of future growth. If a company exceeds these expectations its stock can do quite well. On the other hand, a tech stock that disappoints with slower-than-expected revenue growth can see its shares fall significantly. These companies don’t tend to pay significant dividends to investors, so they aren’t appropriate for those who seek regular ongoing income. Technology shares are often impacted by broader macroeconomic factors such as economic growth and the level of long-term interest rates. An emerging risk with the tech sector is that a company sees its products banned from certain countries for geopolitical, regulatory, anti-competitive or national security reasons. Last Updated: 11/04/2024 View more View less

Technology sector mutual funds and ETFs primarily invest in high-tech businesses in the U.S. or elsewhere. These funds can be actively or passively managed, and may own, depending on their mandate, a mix... Technology sector mutual funds and ETFs primarily invest in high-tech businesses in the U.S. or elsewhere. These funds can be actively or passively managed, and may own, depending on their mandate, a mix of small, mid, and large capitalization stocks. Funds focused on this sector can own, produce or maintain computer or related hardware/software components, semiconductor, specialized software and related services, online services, networking and related hardware/software, and internet infrastructure. Some concentrate on a single technology industry, while others take a diversified approach. Additionally, this sector can also include dedicated technology service providers, including technology consultants. Technology mutual funds and ETFs tend to attract investors willing to take on more risk in search of higher returns. Stocks in this sector often trade at lofty valuations, as investors price in high levels of future growth. If a company exceeds these expectations its stock can do quite well. On the other hand, a tech stock that disappoints with slower-than-expected revenue growth can see its shares fall significantly. These companies don’t tend to pay significant dividends to investors, so they aren’t appropriate for those who seek regular ongoing income. Technology shares are often impacted by broader macroeconomic factors such as economic growth and the level of long-term interest rates. An emerging risk with the tech sector is that a company sees its products banned from certain countries for geopolitical, regulatory, anti-competitive or national security reasons. Last Updated: 11/04/2024 View more View less