Williamstown, MA, July 05, 2008 --(PR.com
)-- With jobs numbers weighing down the market again today, investors are looking for a light at the end of the tunnel. Fidelity Independent Adviser’s ETF Momentum Tracker spotlights iShares S&P North American Technology (IGM) in its issue released yesterday, a fund whose momentum has grown even in the rockiest of soil.
“The technology sector usually gets hit hard (at times like these)”, says publisher Don Dion, “but many tech firms proved surprisingly resilient.”
IGM took the 14th spot for the second week on Dion’s table, climbing from its 33rd position back in April.
Dion credits IGM’s move to a shift in customer sentiment in recent months: “starting last fall, investors have favored more defensive positions in stocks of diversified companies with large cash flows.”
IGM has more than 50% of its assets in the fund’s top ten holdings, an allocation that Dion calls “standing operating procedure”.
While small tech firms have been caught in the market undertow, IGM’s holdings in tech Goliaths, Microsoft, IBM and Apple, have kept the fund afloat, “Big Blue owed its strong showing largely to heavy spending from corporate customers” Dion noted, “many of which invested in products and services designed to boost productivity and cut costs.”
Will IGM continue to gain momentum? Dion says it depends on how much tech spending slows in response to U.S. economic turmoil, success of the latest products released by major U.S. tech firms, and the ability of those firms to succeed in international markets.
Dion will be watching IGM’s holdings to see if news will continue to aid the fund as a whole. He believes that Apple’s release of the iPhone into international markets later this year might “help its stock regain the intense momentum it had last fall.” Shares in Apple were down more than 14% year to date through June 27.
ETF Momentum Tracker has yet to add this fund to its core portfolio, noting that IGM’s recent standard deviation of 15.72 made the fund almost twice as volatile as the S&P 500 for the trailing three-year period.
“The technology sector is always unstable” Dion adds, “and the added risk associated with this type of fund particularly stands out during turbulent times like these.”
Dion concludes, however, that IGM may have the right idea when it comes to composition, noting “firms that are most likely to eke out growth and stock gains during a market slowdown are the large companies that dominate this fund's portfolio.”
ETF Mometum Tracker is a member of Fidelity Independent Adviser’s family of financial publications. With more than 70,000 subscribers in the United States and 29 other countries, Fidelity Independent Adviser publishes four monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers. http://www.fidelityadviser.com/
Publisher Don Dion is also president and founder of Dion Money Management, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Massachusetts, Dion Money Management manages more than $730 million in assets for clients in 49 states and 11 countries. A licensed attorney in Massachusetts and Maine, Mr. Dion has more than 25 years’ experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management. http://www.dionmm.com/