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Technology ETF (VGT) Hits New 52-Week High
For investors seeking momentum, Information Technology ETF Vanguard (VGT - Free Report) is probably on the radar. The fund just hit a 52-week high and is up 56.29% from its 52-week low price of $310/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea of where it might be headed:
VGT in Focus
The underlying MSCI US Investable Market Information Technology 25/50 Index is designed to transition in and out of securities affected by pending updates to the information technology sector. The product charges 10 bps in annual fees (see all Technology ETFs).
Why the Move?
The broad technology sector has been an area to watch lately, with the Fed adopting a dovish stance. There is now the chance of a 75-bp rate cut in 2024, with the number of rate cuts increasing to three from the two rate cuts previously priced in. As the tech sector relies on borrowing for superior growth, it would be cheaper to borrow more for further initiatives when interest rates are low.
With innovative projects and major product launches this year, the artificial intelligence boom is expected to prevail in 2024, driving the rally in the tech market further. Additionally, moderating inflation levels also boost the fund.
More Gains Ahead?
Currently, VGT has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook. However, it might continue its strong performance in the near term, with a positive weighted alpha of 47.20, which gives cues of a further rally.