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The FT reports that investors are dumping money into technology stocks at the fastest pace since January. No surprise there, as tech shares are the best performing sector in the market YTD. The quarterly performance comparison crowd and those who feel they have somehow missed out are chasing return in the sector. If you are an index-based investor (that includes ETFs), tech is your biggest sector exposure and the FAANG stocks are amongst your largest individual positions.
Tech stocks have posted blistering gains this year. The MSCI World information technology index, which covers big and medium capitalisation tech companies across developed economies, has risen 30 per cent year to date, almost double the gains of the broader benchmark.
The increased spotlight on the tech sector comes after a survey released by BofA showed that bets on tech stocks rising is once again viewed as the most crowded trade among global fund managers.
Is now the time to chase tech shares higher? As Sir John Templeton said “If you want to have a better performance than the crowd, you must do things differently from the crowd.”
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Jeremy Jones, CFA
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