Tech companies have had a tough time over the past year. In China, a series of crackdowns on large Internet-based companies have caused their stock prices to drop dramatically; experts cannot say for sure whether they will recover in the near future.
Globally, the fortunes of tech companies have been much more diverse. Some have benefited from working from home in the era of the pandemic, while others have suffered for various reasons.
Tech stocks plunged in early October 2021, fueling speculation that we may be heading into a bear market in the fourth quarter. However, this was short-lived as investors rallied to the downside and prices rallied within days.
How tech stocks are really doing around the world
There was a lot of movement in the last few months leading up to the last quarter of 2021. So much so that it was tech stocks that did the heavy lifting to keep stock markets up.
Here’s a quick look at what happened to the major players in this industry:
Companies providing software as a service (SAAS) and cloud computing services were the ones that saw the majority of the decline at the start of the fourth quarter of 2021. However, the decline in shares of these companies coincided with the season. of their results, indicating that it was likely a profit-taking exercise.
There may still be red flags surrounding the year-end shopping period which is typically a busy season for tech companies, but supply chain issues brought on by the pandemic can still drive business profits down. technological.
Electronic equipment and products
Manufacturers of physical products – such as electronic components and devices – also saw their shareholders take profits ahead of the announcement of fourth quarter results.
In general, the pandemic has primarily had a positive impact on tech companies involved in these industries, as the global lockdown has also resulted in higher demand for devices and gadgets for gaming, e-commerce, home entertainment and more. working from home, but the true impact of the pandemic on these sectors requires a longer-term perspective.
Video games have grown into a billion dollar industry that has paid dividends over the past two decades. Variety has announced that the market is expected to reach a value of $ 200 million by 2023.
That said, the pandemic has sparked a gaming boom and gaming could be heading for a market correction as the gradual lifting of movement restrictions around the world could mean consumers could have less time to play in the months and months. coming years. This may translate to weaker growth projections compared to recent years, but the holiday season remains a significant profit period.
Are tech stocks at a discount?
Profit-taking exercises suggested there would be a downtrend at the end of September, but it didn’t last long.
Since then, investors have flocked to discounted stocks. Instead, this flurry of activity helped them lift markets and support index funds.
While tech stocks rally, hardware-dependent ones still lag behind. Companies that manufacture graphics cards and game consoles in particular still have their earning potential limited by the global semiconductor shortage which limits their ability to meet demand. This shortage is expected to last until 2023.
If you’re planning to dive deeper into the tech equity industry, check out Principal Asset Management’s range of investment solutions to get the exposure you want while managing risk better.
Diversify your portfolio with technology stocks with Principal and EPF i-Invest
Growing your retirement fund should be one of your top priorities, regardless of your age or financial situation. You don’t want to have to downgrade your current lifestyle during your golden years, so planning ahead is extremely important.
EPF i-Invest allows you to protect your retirement plans and even – potentially – improve your EPF returns. Develop your EPF savings your way with EPF i-Invest and Principal.
If you’re ready to gain exposure to the global tech market, Principal Asset Management can help. Principal offers over 70 trust funds to help investors diversify their portfolios based on their risk tolerance and personal preferences.
The Global Titans Principal Fund provides exposure to global markets for those who are either new to investing or have little time to do their own research. It compares to the S&P 500, MSCI Europe and MSCI Japan, and aims to increase investor funds over the medium to long term.
Those looking for a more Asian-centric portfolio can refer to the Principal Asia Titans Fund which will instead follow the largest companies in Asia (excluding Japan).
From November 11 to December 12, 2021, you can participate in the year-end principal bonus campaign when you invest a minimum of RM 1,000 through EPF i-Invest. Start your investment journey with Principal and get 0.38% and RM50 Touch ‘n Go eWallet Reload PIN (new investors) or reload your investments and get 0.58% Touch’ n Go eWallet Reload PIN (existing investors). Thermal baths and conditions of application
Please visit Principal for more information.
You are advised to read and understand the relevant Prospectus, Information Memorandum and / or Information Document, including any supplement and the Product Sheet (if applicable) before investing. Among other things, you should consider the fees and charges involved. Registration of the relevant Prospectus, Information Memorandum and / or Information Document, including any supplement thereto and Product Fact Sheet (if applicable) with the Securities Commission Malaysia (SC ) does not mean or indicate that the CP recommends or approves the funds. A copy of the relevant prospectus, information memorandum and / or information document, including any supplement and the product sheet (if applicable) can be obtained from our offices, distributors or from our website at address www.principal.com.my. The issue of all units to which the Prospectus, Information Memorandum and / or Information Document concerned relates will only be made upon receipt of a request mentioned in and accompanying a copy of the Prospectus, the Memorandum of information and / or the Information Document concerned. Please note that investments in relevant mutual funds, wholesale funds and / or private pension plans involve risk. An overview of the various risks incurred is described in the relevant Prospectus, Information Memorandum and / or Information Document. As an investor, you should make your own risk assessment and seek professional advice, if necessary. Securities Commission Malaysia does not verify the advertisements produced by Principal.
Our sincere thanks to