Investors can rely on tech for next decade
Global technology sectors could continue delivering healthy returns to investors for the next decade, according to Nasdaq’s head of research and development, Dave Gedeon.
In a presentation to the Australian Securities Exchange, Gedeon said tech was the current driver of the economic engine, with the Nasdaq 100 Index returning of 17.6 per cent per annum since its inception (1985) to October this year.
“While recent volatility has caused a pull back in the sector, long term performance and underlying sales and earnings growth are some of the constructive indicators of technology as a long-term growth opportunity that’s here to stay,” he said.
BetaShares’ David Bassanese, who presented an outlook for global markets, said tech stocks had been remarkably strong in the past three years, significantly outperforming the broader market benchmarks – including the S&P 500 index.
“We continue to see strong demand in our technology range from all types of investors, including SMSFs, advisers, self-directed investors and millennials, who are seeking diversified exposure to the global technology sector,” he added.
According to FE Analytics, the Nasdaq 100, which consists of the FANG stocks (Facebook, Apple, Amazon, Netflix and Google) returned 20.56 per cent for the five years to date, 14.26 per cent for the three years to date, and 13.40 per cent for the year to date.
In Australia, information technology is performing similarly, consistently well, with the S&P ASX 200 Information Technology index producing standard top and second-quartile returns.
The Australian index consists of stocks like Afterpay Touch, Myob Group Limited, Praemium Limited and IRESS Limited.
It placed in the second quartile for the five years to date with returns of 11.15 per cent, second quartile again for the three years to date with returns of 13.88 per cent, and top quartile for the year to date with returns of 13.64 per cent.
It’s performed more in line with the Nasdaq 100 in recent years, and has continued to do so even in the last six months. The chart below shows the performance of both indices for the three years to date.
Recommended for you
The latest budget papers have outlined a $10 million provision for ASIC greenwashing enforcement activity as well as funds for a sustainable labelling regime to be partially met by industry levies.
Betashares has expanded its fixed income solutions with the launch of a new ETF offering exposure to subordinated bonds issued by the big four Australian banks.
The latest monthly Bank of America global fund manager survey has found investors are starting to shift cash into bonds as cash allocations reach a three-year low.
AUSIEX analysis has discovered the net traded value of Australian dollar fixed income ETFs more than doubled from January to April, reflecting growing investor demand.
