Investor behind top tech fund warns mega-cap rally is running on fumes

The investor behind a prime 10 international ETF sees a bearish pattern within the Huge Tech rally.

Anna Paglia, who oversees the tech-heavy Invesco QQQ Belief, sees indicators traders are beginning to take a defensive strategy to the group.

“In case you have a look at the flows which might be flattish yr so far, that signifies there’s actually not a excessive conviction within the brief time period,” the agency’s international head of exchange-traded funds and listed methods instructed “ETF Edge” this week.

The QQQ, which tracks the Nasdaq 100 index, hit a 52-week excessive on Friday. Plus, it has outperformed the S&P 500 by greater than 17% in 2023.

Greater than half of the fund’s allocations are in expertise shares. The ETF’s prime holdings embody Microsoft, Apple, Amazon and Alphabet — that are up greater than 30% because the begin of the yr.

Two different prime holdings, Meta Platforms and Nvidia, are up greater than 100% for the yr. Nvidia is about to report its quarterly earnings on Wednesday.

“Individuals do not know if … this efficiency is just pushed by the mega caps or if there’s extra in there,” she stated.

Nevertheless, Paglia suggests the problems aren’t everlasting.

“We’re nonetheless agency believers within the QQQ, however it’s a wait and see for our purchasers,” she stated.

The QQQ was up nearly 4% this week.

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