The investor behind the high-tech fund has warned that the mega-cap rally is running on fumes

The investor behind the top 10 global ETF sees a bearish trend in the big tech rally.

Anna Paglia, who oversees tech-heavy Invesco QQQ Trust, sees signs that investors are starting to take a defensive approach to the group.

The company’s head of global exchange and index strategies told “ETF Edge” this week that “if you look at the flows that have been flat year-to-date, this shows that there is not a lot of guilt in the short term.”

The QQQ, which tracks the Nasdaq 100 index, hit a 52-week high on Friday. Additionally, it outperforms the S&P 500 by more than 17% in 2023.

More than half of the fund’s allocation is in technology stocks. The ETF’s top holdings include Microsoft, Apple, Amazon and Alphabet – up more than 30% since the start of the year.

Two other top holdings, Meta Platforms and Nvidia, are up more than 100% for the year. Nivea is set to report its quarterly earnings on Wednesday.

“People don’t know … this performance is only driven by megacaps or if there’s a lot in there,” she said.

However, Paglia points out that the problems are not permanent.

“We’re still strong believers in QQQ, but it’s a wait and see for our customers,” she said.

QQQ is up about 4% this week.

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