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"Science and technology revolutionize our lives, but memory, tradition and myth frame our response"~ Arthur Schlesinger
With nearly eight billion people across our planet currently confined to their homes, it's safe to say we are in unprecedented times. From a financial market standpoint, investors faced volatility of epic proportions as markets plunged to depths unseen in years.
Throughout this turmoil, two common themes stand out: the ability of humanity in every part of the world to summon the willpower and resilience to persevere and survive and the pivotal role that technology is playing in keeping society moving forward and productive. From a market perspective, another theme that materialized was how well the technology sector has performed during the pandemic.
The strength of the technology sector
As the COVID-19 pandemic materialized, the financial markets began to drastically fall in a very short amount of time. While the retreat was fast and sharp, the Solactive Global Technology Leaders Index (the index that tracks the technology sector) captured less of the drawdown and recovered in a shorter period when compared to the other main indexes like the S&P 500 and the Nasdaq. From a year-to-date perspective, the Solactive Global Technology Leaders Index is up 17% for the year, while the S&P 500 Index and the Nasdaq returned 2.4% and 13.2% respectively, as of June 05, 2020.
What were the key drivers to technology's outperformance?
To find out what some of the main factors to the technology sectors strong performance during the pandemic, check out our new article Technology’s Turn - How the technology sector is showing strength during uncertain times. Within the article we outline the key factors that contributed to the outperformance of the Technology sector and discuss various companies that began to show perseverance before, and particularly, during the pandemic. What’s more, all of the companies discussed within the paper are also holdings in the TD Global Technology Leaders ETF (TEC).
Glimmers of hopeWe believe that there are glimmers of hope for the pandemic. And, if the first five months of 2020 can be used as a guide, the rest of 2020 should bode well for the Technology sector. Investments like TEC remain a good option for investors wishing to gain access to some of the world’s leading technology companies exposed to promising themes outlined within the paper.
The pandemic has taught us all a lot about ourselves and has shown what a drastically different daily life can look like. Moving forward, aspects of this current style of daily life may become more permanent. If this is the case, technology will likely continue to grow and become an even more important part of our lives.