Technology leads sector performances in 2019

A large volume of surprisingly positive earning expectations at the end of Q2 meant the technology sector has gone strength to strength, according to SPDR’s August Sector Snapshot report.

According to State Street Global Advisor’s ETF arm, the key drivers for the sector’s performance is the semiconductor and hardware industries rebounding from Q1 as well as the software and services’ rally continuing in to the second quarter of the year.

The world technology sector has a year-to-date performance of 30.2% following July’s rise of 2.9%. The US was an important role in this with the region’s performance for July being 3.3%. Europe’s technology sector wasn’t quite up to par but still saw an improvement of 1.0%.

Technology in 2019

Two major market differences between the US and Europe were the performances of the communication services and healthcare sector.

The healthcare sector has been the State’s second-best performing sector, behind technology, with July and YTD performance of 3.1% and 23.4%, respectively. Across the pond in Europe, comms is the worst performing sector for the year so far with a rise of 2.3%.

Alternatively, healthcare was Europe’s second best performing for July bringing its YTD performance up to 17.4%. Whereas in the US, it was the second worst performing sector, just above energy, with a loss of 1.7%, bringing the YTD performance down to 6.0%.

Despite having a promising April, financial ETFs in Europe saw the largest outflows in July, meaning its YTD flows is -$3.1bn, the lowest of any sector. Comms strong performance this year reflects in its flows as its ETFs took in $52m in July, raising its YTD flows to $854m.

Technology in the US saw inflows of $779m in July, meaning its YTD flows bounced back to positive at $750m. Additionally, the energy sector lost a further $48m in assets in July causing its flows for the year to fall even further to $5.4bn.

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