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BMO Nasdaq 100 Equity Hedged To CAD Index ETF (ZQQ)
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RBC Life Science and Technology Fund Series D (RBF1030)
Q: Over the long run these two technology ETFs show comparable returns. However while ZQQ has significantly outperformed RBF1030 over the past year, the trend has reversed over the last month. RBF 1030 has a higher healthcare component than ZQQ and recent healthcare news (diabetes, weight loss drugs) seem to be driving it forward while stumbling tech shares recently are holding back this component. Given the big run up in technology over the past year, do you think RBF1030 with its higher healthcare component might be safer or provide better performance over the next year or so.
5i Research Answer:
We don't think we would draw any conclusions from one-month returns. Moreover, we do think healthcare and technology are sectors that are essential that no matter what happens with the macro environment, the demand will still be there. In a slowdown, for example, we think healthcare will likely do better than tech. If that is something an investor is bracing for, we would be okay with the move. However, we also think both in a portfolio offer benefits.