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iShares S&P/TSX Capped Information Technology Index ETF (XIT $63.66)
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INVESCO QQQ Trust (QQQ $600.38)
It is only in the last month that there is an obvious change. XIT has plummeted since the start of 2026, while QQQ has roughly held it's own.
XIT is comprised of 10 stocks, with SHOP at 25%, CLS at 24%, CSU at 23%, GIB.A at 12%....totalling roughly 85% of XIT.
Reading up on these four, I think I can paraphrase the 5iR answers as: SHOP-no major concerns, CLS-no concerns at all, CSU-should be ok in the long terms (unless AI is indeed a major disruptor to the software subset of technology, GIB.A-should be ok, but not exciting. My apologies if I got this wrong.
For asset allocation purposes, I added funds to XIT in late December and early Jan around the $80 level (this is after trimming at $86). So if I liked XIT at $80, I should really like it in the $60's. I have more funds available to add to XIT, but I am very proud of my latest action this week or so....just sit on my hands and do nothing.
I like buying when the proverbial "blood is running down the street" and could easily top up now. However, we may now be looking at some capitulation...not sure? I also look at the old expression that after a parabolic rise, the stock could easily settle by 1/3 to 1/2.
Do you have any advice as to when to deploy new funds into XIT? Should we wait until CSU reports in late-Feb? Are there other factors to consider.
Thanks.....Steve
This would be a much simpler answer if the ETF was more diversified. But, with 24% positions, it becomes more of a company-specific question. The assessments of our review is very accurate. Are we near capitulation? We would think so, but we would have said that last week as well. There is a total aversion to anything software right now. Because it is a sentiment shift, it is impossible to gauge on timing. Sentiment doesn' care about fundamentals. The easiest solution if adding is to buy partial positions (say, 1/4) and not try to perfectly time things. There seems to be capitulation moreso in the US right now. But the sector needs a catalyst, as good earnings doesn't seem to be doing it right now.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in XIT, QQQ.