June 15, 2020

Exciting Tech ETF May Be More Defensive Than It Appears

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https://www.benzinga.com/trading-ideas/long-ideas/20/06/16251852/exciting-tech-etf-may-be-more-defensive-than-it-appears?

Exciting Tech ETF May Be More Defensive Than It Appears

2020-06-15 00:00:00, Todd Shriber, ETF Professor, Benzinga

Content Categorization
/Finance/Investing
/Business & Industrial
/News/Business News/Financial Markets News

Word Count:
583

Words/Sentence:
23

Reading Time:
3.89 min

Reading Quality:
Adept

Readability:
13th to 15th

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It's taken some lumps along with other groups at the hands of the coronavirus, but it's also been one of the best-performing groups, a theme some experts see continuing in the back half of the year.

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In effect, TECL is a leveraged play on Microsoft MSFT and Apple AAPL because those two stock combine for about 40% of the Technology Select Sector Index.

No, the tech sector hasn't been perfect this year.

They certainly aren't long-term trades, but some market observers are highlighting the defensive properties of technology stocks.

What Happened

TECL is designed to deliver triple the daily returns of the Technology Select Sector Index.

Leveraged exchange traded funds, such as the Direxion Daily Technology Bull 3X Shares TECL 0.22%, usually aren't viewed as defensive ideas.

While some of this is temporary and should reverse as the crisis fades, many of these trends will remain long after COVID 19 has been defeated."

What's Next

As for issues that could bring the bearish TECS into focus, politics and rapid developments on the coronavirus vaccine front come to mind.

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