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Quarter-End Insights

Technology: Opportunities Pepper Most Subsectors

We expect U.S.-China trade talks to lead to greater end product demand down the road.

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The Morningstar U.S. Technology Index is up 23% year to date through June 25, making it the top-performing sector. U.S. and China trade tensions remain a source of volatility, most notably with the U.S. ban on selling into Huawei, a significant smartphone and network equipment maker. We continue to believe that a highly interwoven tech supply chain will still be quite difficult for the U.S. and China to unwind. In turn, our valuations imply an eventual deal (and resumption of sales into Huawei).

Despite a strong 1Q, Tech had a volatile 2Q - source: Morningstar Analysts

Brian Colello does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.