$1 trillion technology rally keeps on rolling

Tech valuations are at levels never seen before this bull market, but the sector is seeing more interest than any other

Apr 29, 2019 @ 3:52 pm

By Bloomberg News

For technology stocks, the superlatives are endless this year. But rather than take profits and run, investors are flooding the space.

The sector is outperforming every other industry. In 17 weeks, only one has seen technology finish in the red. And more than $1 trillion in market capitalization has been added over the span of four months.

(More: How mid-cap growth funds owned the first quarter)

Even with tech valuations at levels never seen before this bull market, the sector is seeing more interest than any other.

"Tech flows are white hot," Steven DeSanctis, a U.S. equity strategist for Jefferies, wrote in a note to clients Sunday.

In the week ended April 26, the three U.S. stock exchange-traded funds that attracted the most interest were tech-centric: the Invesco QQQ Trust Series 1, which tracks the Nasdaq 100, the Technology Select Sector SPDR Fund, and the Vanguard Information Technology ETF.

And while U.S. equities had more than $6 billion in net outflows last week, tech stocks saw $1.3 billion enter their coffers, according to Bank of America Merrill Lynch data, citing EPFR Global.

Fueled in large part by a massive trade April 23, investors poured more than $440 million into the Vanguard fund, known by its ticker VGT, last week. That amounts to the largest weekly inflow ever for the $21 billion fund. It recently overtook its State Street Corp. competitor, XLK, to become the most popular technology sector ETF on the market.

Apple Inc., which is set to report earnings on Tuesday, is VGT's largest holding. Microsoft Corp. is the second-largest, and combined, the two companies make up roughly 30% of the ETF.

(More: `Investing on steroids' pays off as thematic ETFs outperform)

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