On February 28th, I posted an article entitled “Technology Stocks – when to get in again!”  I looked at a Canadian focused ETF and a U.S. one to determine the potential downside – or rather what prices I’d consider good entry points should they keep falling as expected.  Here’s a quote from that piece:

The Canadian ETF is the  ISHARES SP TSX CAPPED INFO TECH IDX ETF (symbol XIT on the Toronto Stock Exchange). It’s top five holdings aren’t surprising.  They include Shopify, Constellation Software, CGI and Open Text.  All are the darlings of the skinny collection of publicly traded tech stocks in Canada.  The top five in fact account for 85% of the index fund.

feet in waterI also said: ” For the Canadian ETF I’d get my feet wet (before diving in) at $25, and for the U.S. ETF it would be $70.  I might be early, but better early than never.”  Well the XIT (the symbol on the TSX) has retreated to just above the $25 level, which inspired me to get my feat wet so to speak (buy it).  The entire list of holdings is in the following table.

XIT Holdings

Of the top four holdings, I’ve followed (and often kicked myself for not just holding on to them over the years) Constellation, CGI and Open Text for decades.  Shopify I admit I missed completely; unable to get my head around the ridiculous valuations companies with no earnings were getting prior to this crisis.

The U.S. ETF also managed to get down to my ‘now interesting’ price, trading in the neighborhood of $71.

The U.S. based ETF is SPDR NYSE Technology ETF (symbol XNTK). It’s top 10 list of holdings includes Shopify also (not nearly as much) but it also owns names you’d expect such as Tesla, Netflix and AMD – among its 36 different holdings.

I haven’t bought this one yet, since the exchange rate makes it much more expensive in $CAD.  I’m not offering investment advice, just sharing my own experience.  Is there potential for further downside?  Of course there always is…but in my view we’re at the point where the potential upside far outweighs the downside.




 


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About the Author

Malvin Spooner is a veteran money manager, former CEO of award-winning investment fund management boutique he founded. He authored A Maverick Investor's Guidebook which blends his experience touring across the heartland in the United States with valuable investing tips and stories. He has been quoted and published for many years in business journals, newspapers and has been featured on many television programs over his career. An avid motorcycle enthusiast, and known across Canada as a part-time musician performing rock ‘n’ roll for charity, Mal is known for his candour and non-traditional (‘maverick’) thinking when discussing financial markets. His previous book published by Insomniac Press — Resources Rock: How to Invest in the Next Global Boom in Natural Resources which he authored with Pamela Clark — predicted the resources boom back in early 2004.

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