Despite being down 59% and 25%, respectively, this year, the popular ARK Innovation ETF and the Technology Select Sector SPDR Fun aren't currently exhibiting any appreciable outflows. Despite their terrible losses this year, it appears that the majority of ETF investors are sticking with technology.
Investors are more devoted to the notion of growth than to the short-term fluctuations in the market, according to Anna Paglia of Invesco.
"You do not assess the growth of companies based on what's happening today, [and] what's going to happen next month," the firm's global head of ETFs and indexed strategies said (per CNBC). "You assess growth based on what you think is going to happen in five years or 10 years."
The Nasdaq is still roughly 32% behind its all-time high set in November of last year. The Nasdaq increased by nearly 3% on Friday and more than 2% overall during a busy period of earnings season. Despite Amazon's poor performance in the wake of Thursday's quarterly news and outlook, the tech-heavy index made a return.
According to Amazon, it anticipates fourth-quarter revenue to be between $140 billion and $148 billion, up 2% to 8% from the same period last year. Refinitiv reports that analysts were anticipating sales to total $155.15 billion. Although sales growth was back in the double digits in the third quarter with a 15% increase in revenue, Wall Street's expectations were not met.
Amazon has had a difficult year thus far, much like the rest of Big Tech, as it deals with macroeconomic challenges, skyrocketing inflation, and rising interest rates. These difficulties came at the same time as a downturn in Amazon's main retail business as customers started going back to physical stores to shop.
However, a lot of large-volume ETFs, such as the Proshares Ultrapro QQQ, an ETF that tracks the Nasdaq 100, are also keeping investors. This year has seen a 74% decrease. According to Dave Nadig of VettaFi, the prospects for future expansion are what keep investors engaged. Since their introduction, the short and leveraged QQQs in the ETF market have been "stalwarts for volume," according to Nadig.
"We can turn to the QQQ as a perfect example here. The people who are trading short Qs and leverage Qs are not doing that because they're looking for a more efficient beta for their retirement plan. They're doing that because they're making a call in tech," the firm's financial futurist said.
