Rising valuations and hefty year-to-date gains for big technology stocks are pushing some investors to diversify away from the sector that has led markets for years.
FILE PHOTO: A person waits on the Wall Street subway platform in the Financial District of Manhattan, New York CityNEW YORK -
Apple Inc is valued at 26.2 forward earnings, while the information technology sector, up nearly 28% this year, carries a forward P/E of 26.4. Limiting exposure to tech stocks over the last decade has tended to hurt portfolio performance over the long run, making investors wary of cutting their holdings too drastically. Still, some are looking to broaden their portfolios to reduce their exposure to the sector’s biggest names.
“Technology has been a winning group for many years, and we expect it will continue to be so in the future,” they wrote in a Friday report. “But as investors consider where to allocate capital today … we think it likely they will seek out sectors with more exposure to improving economic fundamentals.”
"What we're doing is finding emerging companies that have even better growth than the giant companies and rational valuations that will outperform over multi-year periods," Fish said.
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