Picking out the Tech trend winners

It will not have escaped the notice of any avid stock investor that the market-leading Nasdaq 100 index (QQQ ETF) recently corrected 12% from its 2 September high, before now starting to stabilise.

Technology as a sector continues to be a clear momentum winner over the last 12 months, in spite of this setback. Investors may thus want to use this correction as a buying opportunity in the sector. But where to focus one’s efforts?

One could of course just buy index exposure via the Nasdaq 100 ETF ( EQQQ in the UK), or opt for the technology-focused Herald Investment Trust (LON:HRI) Herald Investment Trust.

But instead, I would rather look for pockets of relative strength among subsectors of the broader technology sector, to see which themes have held up best over 2020 as a whole.

Winner 1: Video Games

Just look at the performance of this ESPO Van Eck video games and eSports ETF, relative to the QQQ Nasdaq 100 index.

I must declare a personal interest here: I am a firm believer in the structural growth in this particular segment of tech and home entertainment, and have a number of UK- and US-listed stock investments in this area.

Remember too, that there is a lot of positive news flow coming to this subsector, with the imminent launches of the new Microsoft Xbox and Sony Playstation consoles, plus of course the Christmas shopping season...

ESPO Video games ETF beats the Nasdaq hands-down!


If investors return to investment in the Tech sector, then video games and eSports should be a segment that continues to ride strong earnings and price momentum, in spite of often lofty valuations.

Winner 2: Online Retail

Lockdown has clearly been a boon for shopping from home, but I believe that this has just accelerated an already well-established structural trend, as with video games.

Again, I must declare a personal interest in this subsector, as I do own shares in a number of online retailers.

According to the ETF provider Global X, e-commerce market penetration of retail in the US received a large boost through to May this year thanks to the COVID effect, but is also set to accelerate the growth in e-commerce in the years ahead, driven by growth in Food &…

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