Opportunities Are Arising in Software and Cybersecurity
Compared with the previous quarter, patient investors have some good opportunities.
Like the broader stock market, technology stocks sold off at the end of the first quarter over concerns about COVID-19 and the likelihood of a recession in 2020. As of March 26, the Morningstar US Technology Index was still up 10.5% on a trailing 12-month basis, outperforming the U.S. equity market, which declined 6.4%. Year to date, technology was again an outperformer during the bear market, down 10.3% compared with the broader U.S. equity market, which was down 19.1%. Before COVID-19 concerns, tech fared well in late 2019, with optimism that the U.S. and China can reach trade agreements and avoid a full-blown trade war, an issue that weighed on tech in late 2018 and at times in 2019.
Tech outperformed the market at the start of the COVID-19 sell-off. - source: Morningstar
Brian Colello does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.