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Best Sector of February and Its Top ETFs & Stocks

Sweta Killa

The technology sector, which is heavily depended on China for revenues, has been the biggest beneficiary of the optimism surrounding trade deal between the United States and China. This is especially true as the nearly year-long trade spat between the world’s two largest economies seems to be coming to an end after Donald Trump delayed his plan for raising tariff on $200 billion worth of Chinese goods from 10% to 25%, indicating a fruitful trade deal (read: Trump Postpones Tariff Deadline: 5 Hot China ETFs Set to Rally).

A slew of stronger-than-expected earnings results by major technology firms also supported investors’ sentiment. Additionally, the sector’s long-term story remains intact with the emergence of cutting-edge technology such as cloud computing, big data, Internet of Things, wearables, VR headsets, drones, virtual reality, artificial intelligence and machine. The deployment of 5G (fifth-generation) technology — the next wireless revolution — is creating further opportunities. The wave of mergers and acquisitions is also providing further impetus to the space.

Adding to the strength is a pickup in the economy and better job prospects that are giving a solid boost to economically sensitive growth sectors like technology, which perform typically well in a maturing economic cycle. Moreover, the technology sector boasts a solid rank, which places it in the top 32% of the 16 Zacks Sectors, in terms of ranking.

The bullish trend is likely to continue at least in the short term. Given this, investors might want to tap into the space with the top-performing technology ETFs and stocks over the past month. For them, we have highlighted five ETFs and stocks that are poised to perform well heading into the conclusion of the first quarter:

Best ETFs

iShares North American Tech-Multimedia Networking ETF IGN

This ETF provides exposure to telecom equipment, data networking, and wireless equipment companies by tracking the S&P North American Technology-Multimedia Networking Index (read: Top-Ranked ETF Winners in Dow's Longest Rally in 24 Years).

Zacks Rank: #2 (Buy)
AUM: $97.5 million
Expense Ratio: 0.47%
1-Month Return: 14.4%

Invesco Dynamic Networking ETF PXQ

This fund follows the Dynamic Networking Intellidex Index, which measures the performance of the companies engaged in the development, manufacture, sale or distribution of products, services or technologies that support the flow of electronic information, including voice, data, images and commercial transactions (read: ETFs to Surge on Cisco's Solid Results).

Zacks Rank: #3 (Hold)
AUM: $78.3 million
Expense Ratio: 0.63%
1-Month Return: 11.6%

SPDR S&P Software & Services ETF XSW

This fund targets the software and services segment of the broad technology sector and follows the S&P Software & Services Select Industry Index.

Zacks Rank: #2
AUM: $184.9 million
Expense Ratio: 0.35%
1-Month Return: 11.2%

SPDR S&P Technology Hardware ETF XTH

It offers equal-weight exposure to the technology hardware segment and tracks the S&P Technology Hardware Select Industry Index.

Zacks Rank: #3
AUM: $7.7 million
Expense Ratio: 0.35%
1-Month Return: 11%

First Trust Nasdaq Cybersecurity ETF CIBR

This ETF follows the Nasdaq CTA Cybersecurity Index, which measures the performance of companies engaged in the cyber security segment of the technology and industrials sectors (read: Cybersecurity ETFs Rally on Solid Earnings).

Zacks Rank: N/A
AUM: $802 million
Expense Ratio: 0.60%
1-Month Return: 10.8%

Best Stocks

Jason Industries Inc. JASN

It is engaged in the manufacturing of Finishing, Seating, Components, and Automotive Acoustics.

Zacks Rank: #3
VGM Score: A
Market Cap: $69.04 million
1-Month Return: 85.3%

SITO Mobile Ltd. SITO

It is a technology-based mobile solutions provider offering wireless application development, publishing and distribution (read: 10 ETF Areas to Gain as Trump Delays Additional Tariffs).

Zacks Rank: #3
VGM Score: D
Market Cap: $61.81 million
1-Month Return: 80%

Pareteum Corp. TEUM

It is a provider of mobile software defined network architecture platforms for the telecommunications industry.

Zacks Rank: #3
VGM Score: F
Market Cap: $382.61 million
1-Month Return: 71.5%

eGain Corporation EGAN

This company provides customer engagement solutions and offers offers web customer interaction applications, social customer interaction applications and contact center applications. You can see the complete list of today’s Zacks #1 Rank stocks here.

Zacks Rank: #1 (Strong Buy)
VGM Score: C
Market Cap: $318.92 million
1-Month Return: 68.8%

Maxwell Technologies Inc. MXWL

It is a leading developer and manufacturer of innovative, cost-effective energy storage and power delivery solutions.

Zacks Rank: #3
VGM Score: D
Market Cap: $217.62 million
1-Month Return: 64.2%

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