Q: Would you trim or keep this ETF as is in view of active management and equal placement of these big tech companies in this particular ETF ? In view of high valuations of the seven largest tech companies would the decline of this ETF would be less then the NASDQ index?
Miroslaw
Miroslaw
5i Research Answer:
We would be fine keeping this if one wants enhanced income and exposure to tech. The Nasdaq is close to 58% tech (the Nasdaq 100 is higher than the composite) so we would expect overall correlation to be high. In a decline, the call option premium would help cushion some of the blow so we would expect a slightly less worse decline.
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