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Tech ETFs on Fire as Q2 Earnings Season Heats Up

The technology sector is piping hot and has been the best performing space this year amid concerns over stretched valuations. A rising rate environment, improving industry fundamentals, and emerging technologies such as wearables, VR headsets, drones, virtual reality devices, and artificial intelligence are the key catalysts to the sector's growth.

Investors should note that uncertainty over Trump's reforms is an added advantage to the sector's growth as tech stocks are immune to policy uncertainties (read: ETFs to Buy/Avoid After Healthcare Bill Failure ).

In fact, the S&P 500 information technology sector breached its dot-com era record set in March 2000 with a 22.8% increase year to date. As a result, four popular ETFs - Select Sector SPDR Technology ETF XLK , Vanguard Information Technology ETF VGT , iShares Dow Jones US Technology ETF IYW and MSCI Information Technology Index ETF FTEC - have shown remarkable performances this year. VGT, IYW and FTEC are up nearly 23% while XLK has added a little less of nearly 20%.

The bullish trend is likely to continue heading into the sector's Q2 earnings season. Most of the tech aces such as Apple AAPL , Microsoft MSFT , Alphabet GOOGL and Facebook FB are lined up to report this week and in the next. IYW has the largest concentration on these firms with a combined share of 44.4%, followed by 40.3% for VGT, 38.3% for XLK and 35.3% for FTEC (read: Top Sector ETFs of 1H ).

Let's dig deeper into the earnings picture of these companies that would drive the performance of the above-mentioned funds in the coming days:

According to the our methodology, a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) when combined with a...


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