Sometimes traders can set up a potential plays when they see where investor money is flowing. This is available with fund inflows, which saw technology and healthcare equities gain a lion’s share of February’s flows.
Overall, as Reuters reported, it was a strong month for equity funds. This came despite the threat of tariffs, meaning investors may not be fazed by geopolitical factors as much as anticipated.
“The U.S. economy is still in good shape, and we do not think the announced tariffs will necessarily lead to a major negative impact on growth,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.
Of course, that doesn’t mean geopolitical risk falls completely by the wayside. There are plenty of other factors occurring globally, such as the Russia/Ukraine conflict, which could continue to sway markets. Macroeconomic factors like interest rate policy will continue to weigh heavily and potentially cause market volatility. That said, bond funds also saw a steady allocation of inflows.
“But we believe market volatility will likely persist, and the recent movement in bonds reaffirmed that quality fixed income should remain an integral part of a resilient portfolio that can help investors navigate uncertainty ahead,” he added.
As mentioned, in terms of hot sectors, technology and healthcare garnered interest from investors for most of February. If this pattern continues, traders may want to look at opportunities within those two sectors for potential trade setups.
2 Ways to Trade Tech & Healthcare
Traders who want to play the entire tech industry can look to leveraged funds like the Direxion Daily Technology Bull 3X ETF (TECL ). If artificial intelligence AI continues to maintain its market momentum, that should help feed into tech’s bullishness. TECL provides 300% of the daily performance of the Technology Select Sector Index, which is provided by S&P Dow Jones Indices and includes domestic companies from the technology sector.
It’s been a heavy flu season this year, putting healthcare stocks on the radars of investors. This could explain why healthcare fund inflows have been ticking higher in February, opening a play in the +Direxion Daily Healthcare Bull 3X ETF+ (CURE ). The fund seeks daily investment results equal to 300% of the daily performance of the Health Care Select Sector Index. The index includes domestic companies from the healthcare sector. These include pharmaceuticals, healthcare equipment and supplies, healthcare providers and services, biotechnology, life sciences tools and services, and more.
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