For investors seeking momentum, PowerShares S&P SmallCap Information Technology Portfolio PSCT is probably on radar now. The fund just hit a 52-week high and is up roughly 41.8% from its 52-week low price of $39.41/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 on where it might be headed:
PSCT in Focus
PSCF focuses on the technology segment of the U.S. market, holding 98 stocks in its basket. It is a small cap centric fund with key holdings in the electronic equipment, semiconductors and software segments. The fund charges investors 29 basis points a year in fees and has top holdings in Take-Two Interactive Software, Blackbaud and Littelfuse In (see: all the Technology ETFs here ).
Why the Move?
The technology sector has been an area to watch lately given the sooner-than-expected interest rate hike projection and regained momentum in the U.S. economy. This is especially true as most of the tech companies have huge cash piles on their balance sheets and thus will not face any financing problem in a rising interest rate environment due to their cash reserves. Further, being an economic sensitive sector, technology stocks perform well in a maturing economic cycle.
More Gains Ahead?
Currently, PSCT has a Zacks ETF Rank of 2 or 'Buy' rating with a High risk outlook, suggesting outperformance in the months ahead. Further, many of the segments that make up this ETF have a strong Zacks Industry Rank, so there is definitely some promise for those who want to ride this surging ETF a little further.
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