It’s hard to avoid the key role tech investing has played over the last 12-18 months. While many market observers came into 2023 anticipating pain for big tech names via rate hikes, that pain hasn’t really materialized. Instead, the so-called “Magnificent Seven” proved their growth, contributing massively to the S&P 500’s overall growth. That said, tech investing could require a new twist in 2024 if rate hikes catch up with the economy.
Tech Investing Abroad
Indeed, while rapid rate hikes didn’t necessarily take a bite out of the biggest tech firms last year, rate hikes tend to have a lagging impact. 2024 has only just begun, and even though markets have set their sights on as many as four rate cuts, those aren’t guaranteed. With U.S. equities remaining so expensive, too, U.S. investors may want to get a little more exposure from abroad.
Taking a global tech investing view, then, could really boost an overall tech allocation. Several global tech names in foreign markets present intriguing opportunities, with exposure to growing middle classes with burgeoning spending power. A tech investing ETF with a global view like the ALPS O’Shares Global Internet Giants ETF (OGIG ), then, may make for an appealing option.
The strategy not only holds recognizable U.S. firms in the Magnificent Seven like Microsoft (MSFT), but also strong foreign firms like MercadoLibre (MELI). MELI, an e-commerce platform operating throughout South America, stands out as one of those firms that can offer meaningful diversification away from an overconcentrated U.S. equities landscape.
OGIG tracks the O’Shares Global Internet Giants Index for a 48 basis point (bps) fee. The strategy hit its fifth anniversary as an ETF last year, returning 39.4% over one year. With almost 25% of its holdings coming from abroad, OGIG could be a solid foreign tech investing option for investors looking elsewhere.
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