5 Tech Funds That Gained More Than 20% In 3 Years

The technology sector may have taken a beating toward the end of 2018, but has turned around from the beginning of this year. FAANG’s remarkable performance and a rebound in semiconductor stocks helped tech stocks gain traction.

Tech Stocks Rally

FAANG stocks were in the bear territory last year.

However, FAANG stocks have rebounded and posted impressive gains so far this year, significantly outpacing S&P 500’s performance. Apple partially helped break Wall Street’s five-day losing streak on Mar 11, largely benefiting from Bank of America’s upgrade of the iPhone maker’s stock.

Bank of America analyst Wamsi Mohan upgraded the stock to “buy” from “neutral,” stating that the company’s “stability of supply chain order cuts” and “growth across healthcare, wearables, and increasing services penetration,” will help it bounce back.

In fact, the recent rally in the technology sector was partly led by semiconductor company Nvidia as well, after agreeing to acquire Israeli chipmaker Mellanox for $6.8 billion. The tech stock rally helped the S&P 500 post its biggest rise since late January.

Semiconductor stocks had the worst quarter in 10 years in the October-December period amid slowing demand for memory chips. But the companies have been performing well lately owing to their improved outlook. In addition, the iShares PHLX Semiconductor ETF (SOXX) has gained 17.1% compared with SPDR S&P 500 ETF’s (SPY) 11.4% rise on a year-to-date basis.

An upcoming development on the macroeconomic front could boost the tech sector as well. A well-framed U.S.-China trade agreement would definitely help the tech giants gain.

Per a CNBC report, Donald Trump is furiously pursuing a deal with China in an effort to bring about a rally in stock markets before the presidential election in 2020. Therefore, a favorable trade deal would surely pump up tech stocks, owing to their high exposure to China.

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