Temporary monthly rebounds of 10 per cent or more were “a common sight” during the Nasdaq’s 2000-03 bear market, said Andrew Lapthorne, a quantitative strategist at Société Générale SA
But Jon Guinness, co-manager of the 776-million-pound Fidelity American Fund, said the selloff in tech stocks in the first half shows that many investors were reducing their positions early in anticipation of a significant slowdown in earnings across the sector. “There were good reasons for the exuberance which had spread across the sector prior to the selloff,” Guinness said. “A fifth of the new cars produced in Europe are now electric vehicles, which are computers on wheels. Cloud computing is a development of real substance which is being adopted by many companies. The tectonic shifts driving technology adoption are still there.”
The US$173.7-billion Invesco QQQ Fund, which tracks the Nasdaq 100 index, has gathered net inflows of US$99 million since the start of July. But ETFs that track the wider S&P information technology sector registered net outflows of US$112 million last month, according to State Street Corp., while Cathie Wood’s Ark Innovation ETF also saw net outflows of about US$385 million.