Nasdaq Outperforms Major Indices in 2020: ETFs to Gain
Zacks Investment Research | Dec 30, 2020 01:34AM ET
The year 2020 has been majorly dominated by the coronavirus pandemic. The tech-heavy Nasdaq Composite index, however, stood strong against the virus attack and managed to gain around 43.2% in 2020. Investors have been increasingly observed to give more attention to big tech names such as Apple (AAPL), Amazon (AMZN) and Facebook (NASDAQ:FB) considering the increasing shift to digitization amid the coronavirus outbreak. However, other major stock market indices like Dow Jones Industrial Average and the S&P 500 index have risen around 6.3% and 15.4%, respectively, in the same period.
Going on, among sectors, technology has been the best performer in 2020. In fact, the S&P 500 Information Technology climbed 41.5% when compared to the gains of the S&P 500 Index in 2020.
It is widely believed that the major technology companies’ resilience to the coronavirus crisis supported the tech-heavy index. Major technology stocks like Facebook, Microsoft (NASDAQ:MSFT), Apple, Netflix (NASDAQ:NFLX) and Alphabet (NASDAQ:GOOGL) are positive in 2020. Moreover, Amazon has supported the Nasdaq by gaining more than 77% in the year. Also, Apple is on track to deliver the second consecutive annual gain of above 80%.
Amid the coronavirus pandemic, rising work-from-home and online-shopping trend, increasing digital payments, growing video streaming and soaring video game sales have gained huge popularity and become the ‘new normal’ trends. Given the aggravating coronavirus outbreak in the United States, it is being believed that Internet will continue to be a major requirement in daily lives.
The pandemic has also provided a push to the e-commerce industry as people continue to prefer staying indoors and shop online for all essentials, especially food items.
Cloud computing has emerged as a key technology and is keeping up with the growing work-from-home trend in the fight against coronavirus. It is supporting organizations in remotely processing a lot of information, developing and running key applications and services, and helping employees across the world collaborate while working. The work-from-home model has bumped up sales of PCs, laptops and other kind of computer peripherals. More and more people are spending time at their homes, in line with the social-distancing guidelines.
Along with increased interest in online shopping, customers are resorting to digital payments to clear bills. At the same time, merchants and utility providers are increasingly advocating the same.
The video game industry is seeing a boom as people are increasingly playing video games for some in-house entertainment, while maintaining social distancing amid the pandemic. Moreover, the boom in the video gaming space might remain in the post-pandemic era as well.
ETFs to Gain
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Investors seeking to ride the Nasdaq bulls could consider the following ETFs. These funds might see massive trading volumes in the days ahead if the afore-mentioned trends stay:
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