6 Sector ETFs At All-Time Highs Braving Tech Rout

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The ongoing technology rout triggered by the surging yields has sparked overvaluation concerns in the high growth and high beta sector. The 10-year yields spiked to 1.47% on Mar 3, down from 1.61% reached last week, but were up nearly 50 basis points (bps) from a month ago level.

While investors are selling higher-valued technology stocks, they are flocking to the sectors that are poised to benefit from an improving economy. With the continued progress in more COVID-19 vaccines, rapid vaccination rollout and fresh round of U.S. stimulus, the economy is on the mend and on a speedy recovery path. The combination of factors will lead to higher demand for all types of products and services in the economy.

In particular, Americans will spend on big-ticket items such as vacations and weddings, companies will go on hiring sprees, and the transition to new technologies such as electric vehicles will accelerate. Improvement in corporate earnings growth also bodes well for the stocks.

Further, the latest bouts of data indicate that the economy is growing faster than expected. U.S. consumer spending rose the most in seven months in January while construction spending surged to a record high, boosted by strong private and public outlays. U.S. manufacturing activity increased to a three-year high in February amid acceleration in new orders.

That said, we have presented six ETFs from different corners of the market that scaled new highs in the latest trading session braving the tech rout are among the biggest winners so far this year.

Invesco Dynamic Leisure and Entertainment ETF (PEJ - Free Report) – All-Time High Price: $51.10

This fund offers exposure to companies that are principally engaged in the design, production or distribution of goods or services in the leisure and entertainment industries by tracking the Dynamic Leisure and Entertainment Intellidex Index. It holds a small basket of 31 stocks with AUM of $1.7 billion and average trading volume of 500,000 shares per day. PEJ charges 63 bps in annual fees and has a Zacks ETF Rank #3 (Hold). It has surged 25% this year.

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