5 Low P/E Tech ETFs For Investors

Tech stocks, particularly FAANGs, were once investors’ darling this year. However, things took a turn, causing a steep slump in Wall Street in the October-November period. Rising rate worries, overvaluation and U.S.-China trade tensions led to the massacre.

Per an article published on Associated Press , technology and Internet-based companies normally see high profit margins. In a rising rate environment, the profitability of such companies will be compromised as they will end up paying higher interests on borrowed money.

As a result, the space entered a bear market in mid-November. Online behemoth Amazon.com (NASDAQ:AMZN) and Internet television network Netflix (NASDAQ:NFLX) saw the steepest falls. Amazon probably has seen its FAANGs Slip to Bear Market: What Lies Ahead for ETFs? ).

In the past three months (as of Nov 28, 2018), Facebook (NASDAQ:FB) , Apple (NASDAQ:AAPL) , Amazon and Netflix have lost about 22.4%, 17.6%, 16.0% and 22.5%, respectively. Even the relatively-stable Alphabet (NASDAQ:GOOGL) is off 13.7%.

Why Low P/E ETFs is Needed?

As you can understand, FAANGs got a bashing mainly due to loft valuations. Though valuations got corrected to a large extent in the recent selloff, things may turn volatile with rates on the rise and tariff tensions in the cards.

President Trump has cautioned that his administration could slam a 10% tariff on Apple’s smartphones and computers amid escalating trade tension s with China. This is because Apple’s smartphones and other devices are assembled in China.

Though the Fed chair Powell recently commented that interest rates are “just below” neutral, triggering a stock marker rally, some economists argued that the market’s reaction to his speech was slightly misinterpreted .

So, overvaluation issues are likely to bother the space intermittently. But the huge long-term prospects for cutting-edge technology demands tech stocks in investors’ portfolio. So, investors fearing another correction in the near term, might want to opt for low P/E tch funds.

Below we highlight a few tech ETFs that have low P/E ratios in the space. These ETFs have lower P/E than the largest tech ETF Technology Select Sector SPDR Fund (XLK ) (19.51x).

Global X Autonomous & Electric Vehicles ETF ( (AD:DRIV) ) – P/E 12.87x

The fund tracks the movement in shares of companies which are active in the electric vehicles and autonomous driving segments. Industry experts : Ride the Speeding Electric Vehicle Industry With These ETFs ).

First Trust NASDAQ CEA Smartphone Index Fund ( (SNX:FONE) ) – P/E 14.78x

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The fund looks to track the performance of companies engaged in the smartphone segment of the telecom and technology sectors (read: Why to Cash in on the Slump & Grab Tech ETFs ).

SPDR S&P Semiconductor (NYSE:XSD) ETF (XSD ) – P/E 16.26x

The fund offers exposure to semiconductor stocks (read: Apple Woes Trigger Tech Sector Rout: ETFs Under Threat ).

Innovator Loup Frontier Tech ETF ( (PA:LOUP) ) – P/E 16.77x

The underlying index tracks the performance of companies that influence the future of technology including artificial intelligence, computer perception, robotics, autonomous vehicles, virtual reality, and mixed/augmented reality (read: Tech Guru on FAANGs, AMD, a New Disruptive ETF & More ).

First Trust NASDAQ Technology Dividend Index Fund (TDIV ) – P/E 17.24x

The underlying index includes up to 100 Technology and Telecommunications companies that pay a regular or common dividend. The fund yields 2.47% annually (read: ETFs to Watch on Cisco (NASDAQ:CSCO)'s Solid Results ).

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