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I'm currently invested in ZQQ which is the BMO NASDAQ 100 hedged ETF.

Is this the best ETF at the moment for exposure to the tech industry. I dont want to invest in individual tech stock but want some dispersed exposure.
 

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The problem with XIT is that it only holds Canadian tech companies and Canada's tech sector is just too small for an investor to use only Canadian tech companies for the tech portion of his portfolio.
 

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I'm not endorsing a sector-specific bet, but just observing: Canadian tech (XIT) has been performing spectacularly well:
http://performance.morningstar.com/funds/etf/total-returns.action?t=XIT&region=CAN&culture=en_US

5 year return: 21% annualized
10 year return: 10%
15 year return: 11%

Beware however that most of that outperformance has only happened in the last few years, so it has not consistently performed this well. It was a poorly performing sector for a long time.

This leads to another, bigger question for those of us designing our own portfolios. How do we know whether a TSX sector is a flash in the pan, or something worth investing in? In my own Five Pack, and all the various other X-packs around here, we choose which sectors we want. Most of us exclude tech. But what if Canada's economy turns into a tech-based one, and these stocks become a big part of future TSX performance?

I'm sure investors were asking themselves the same question in the 1990s. The investors who continued excluding tech from their portfolios benefited when tech turned out to be a dud. But what happens if technology really does start becoming a significant part of the TSX performance going forward?

I think it could happen. The Kitchener-Waterloo-Cambridge region and Ottawa are both very tech-heavy, and there is talk of expanding BC's tech sector as well.
 

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ZQQ is good but there is some issue though w its high concentration in the FAANG stocks. They make up ~45% of the index now. There are a few other funds that are a little more diversified and even weighted that were also recommended by some investment and ETF analysts who write for the Gobe or on BNN. FHQ First Trust Alphadex US Tech Sector based on a multifactor approach 79 stocks , or TXF First Asset Tech Giants covered call ( has 12 % in the FAANGS) ~ 54 holdings.

Or a US fund SMH VanEck Vectors Semiconductors Index

Some more ideas.

https://www.theglobeandmail.com/globe-investor/bet-on-high-growth-tech-with-these-niche-etfs/article37946168/
 

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But Jimmy what about the Canadian tech sector, what are your thoughts? It's such a small part of the TSX Composite, but has performed extremely well.
 

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But Jimmy what about the Canadian tech sector, what are your thoughts? It's such a small part of the TSX Composite, but has performed extremely well.
I'm sure it is quite good too. I was just noting how much the US Nasdaq ETFs have become about a small group of stocks. I'm sure XIT is more diversified too. I may look at some tech sector ETFS - I think it is reasonably maybe a little over valued but not as bad as the S&P.

Have tech in some general funds like DQD and XMS.
 

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There's a few good options. I own IVW from iShares and have also looked in to QQQ from Powershares. I'm not a fan of hedged funds.

IVW is a growth ETF that does contain a lot of big name techy companies. I find it a good balance.
 

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It's what I have in my portfolio and certainly better than XIT!!
I wanted to point out performance since Belguy posted this on 2012-08-11. In fact, the Canadian tech sector has been outperforming. In the approx 7 years, annualized performance is

XIT 24.7% per year
ZQQ 17.4% per year

Canadian tech sector wins, even beating NASDAQ (hedged) performance. Who would have predicted this? Not me! XIT had been a useless fund for a very long time.

There's just about no way to predict when a sector will turn hot. Unfortunately, most of us have been underweight tech during this enormous rally.
 

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What the heck is going on with the Canadian tech sector recently? Here's a chart of XIT in lime green against the US benchmark QQQ, in black. They track each other pretty closely until the start of this year, and then XIT starts going absolutely nuts.

I hold a couple of the major holdings (Constellation & CGI Group) in my high risk growth portfolio, but generally have little exposure otherwise.

Link to chart, and attached the image.

xit-vs-qqq.png
 

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What is the reason to invest in a tech ETF when you can gain tech exposure via a broad-market ETF, such as XIC?
 

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What the heck is going on with the Canadian tech sector recently? Here's a chart of XIT in lime green against the US benchmark QQQ, in black. They track each other pretty closely until the start of this year, and then XIT starts going absolutely nuts.

I hold a couple of the major holdings (Constellation & CGI Group) in my high risk growth portfolio, but generally have little exposure otherwise.

Link to chart, and attached the image.

View attachment 19536


hmmmn i'm intrigued but have no explanation. Jas4 since you are the party who authored the chart, perhaps you could take ownership of the question why canadian tech suddenly took off & get back to us?

looks like everybody is dissing QQQ these days. I've posted about the big green's new global tech ETF. Here in this video the TD manager describes why the Nasdaq index is too generalized & old-fashioned to truly be considered tech today. It even contains Pepsi, for crying out loud.

https://www.moneytalkgo.com/video/td-launches-td-global-technology-leaders-index-etf/
 

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One of their major holdings (25%) is on a real run, SHOP.
I think that's what's going on. The outlandishly high return of SHOP (a big weight in XIT) seems to be driving the whole move.

As for tech exposure, there's already plenty of it in the S&P 500. I have no intention to add more tech myself, especially since it correlates very strongly with my employment.
 

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To me the Nasdaq was getting too weighted to the FANG stocks and isn't just technology.

One pure technology ETF I like is the First Trust Alphadex Tech Sector FHQ.F ( hedged) which has far better performance over the past 3 yrs - up 123% vs 65% for ZQQ. This is a well designed, diversified, broad based ETF using a methodology to factor and rank 100 stocks from the Russell 1000 and weight them based on their factor value scores. Has a nice mix of SW , HW, services, electronics, peripherals etc . Had a nice run and might be a little pricey now though.

https://web.tmxmoney.com/charting.php?qm_page=66338&qm_symbol=FHQ

https://www.firsttrust.ca/Retail/Etf/EtfSummary.aspx?Ticker=FHQ
 

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The sector fund, XIT, continues to blow away any other Canadian sector. XIT's trailing 1 year performance is +63%

XIT annualized return was 32% over the last 3 years

... and SHOP up 9% today alone. Just crazy!
 

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The sector fund, XIT, continues to blow away any other Canadian sector. XIT's trailing 1 year performance is +63%

XIT annualized return was 32% over the last 3 years

... and SHOP up 9% today alone. Just crazy!
Lots of big gains.
I was going to sell off some AMBA last week, glad I didn't.

Having seen what shopify offers customers I really should have considered it.
They could have competition from others, but they seem to have really figured out how to make it easy.
It's pretty much the default choice, in a growing market.
 
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