The pros and cons of buying this ASX tech ETF after its 30% rally

MotleyFool04-11

The BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC) has performed strongly, rising by around 30% since the end of October 2023, as we can see in the chart below. So, is the ASX tech exchange-...

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So, is the ASX tech exchange-...</p>\n\n<a href=\"https://www.fool.com.au/2024/04/11/the-pros-and-cons-of-buying-this-asx-tech-etf-after-its-30-rally/\">Source Link</a>\n\n</div>\n","source":"motleyfoolau_stock","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>The pros and cons of buying this ASX tech ETF after its 30% rally</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nThe pros and cons of buying this ASX tech ETF after its 30% rally\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-04-11 04:30 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com.au/2024/04/11/the-pros-and-cons-of-buying-this-asx-tech-etf-after-its-30-rally/><strong>MotleyFool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>The BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC) has performed strongly, rising by around 30% since the end of October 2023, as we can see in the chart below. So, is the ASX tech exchange-...</p>\n\n<a href=\"https://www.fool.com.au/2024/04/11/the-pros-and-cons-of-buying-this-asx-tech-etf-after-its-30-rally/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"FDN","symbol_name":"First Trust Dow Jones Internet I","start_time":0,"source_url":"https://www.fool.com.au/2024/04/11/the-pros-and-cons-of-buying-this-asx-tech-etf-after-its-30-rally/","article_id":"2426280440","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2426280440","pubTimestamp":1712781000,"sourceInfo":{"source_id":"motleyfoolau_stock","name":"MotleyFool"},"weMediaInfo":null,"summary":"The BetaShares S&P/ASX Australian Technology ETF  has performed strongly, rising by around 30% since the end of October 2023, as we can see in the chart below. So, is the ASX tech exchange-traded fund  still an investment opportunity after its rally?its intrinsic valuation is 100% sensitive to interest rates.  But there's plenty of growth  Collectively, many of the ATEC ETF's holdings are delivering good growth. For example, in its recent FY24 half-year result, WiseTech reported free cash flow growth of 13% and statutory net profit after tax  growth of 8%. Meanwhile, CAR Group grew adjusted NPAT by 34% to $163 million. Computershare is benefiting from the sustained high interest rates thanks to the large cash balance of clients it makes interest income on. Ultimately, businesses can justify a high price if the financial and operational performance keeps going well. Many of the ASX tech shares in this portfolio are among the best stocks in the country.  The ATEC ETF might fall in value ","collect":0,"end_time":0,"defaultTopTitle":"fool.com.au","property":[],"viewcount":null,"language":"en","relate_stocks":{"FDN":"First Trust Dow Jones Internet I","SEK.AU":"SEEK LTD","NXT.AU":"NEXTDC LTD","REA.AU":"REA GROUP LTD","BK7503":"科技股","CAR.AU":"CAR GROUP LTD","ALU.AU":"ALTIUM LTD","BK7157":"数据处理及外包服务","PME.AU":"PRO MEDICUS LTD","BK7016":"应用软件","BK4588":"碎股","BK4550":"红杉资本持仓","ETF.AU":"UBS IQ Research Preferred AU Share","XRO.AU":"XERO LTD","WTC.AU":"WISETECH GLOBAL LTD","BK7094":"医疗保健技术","BK7043":"互联网服务与基础架构","BK7002":"互动媒体与服务","TNE.AU":"TECHNOLOGY ONE LTD","BK7033":"数据处理与外包服务","BK4585":"ETF&股票定投概念","ATEC.AU":"BETASHARES S&P/ASX AU TECH","CPU.AU":"COMPUTERSHARE LTD"},"translate_title":"在ASX科技ETF上涨30%后买入该ETF的利弊","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"ATEC.AU":1,"XRO.AU":1,"WTC.AU":1,"TNE.AU":1,"SEK.AU":1,"REA.AU":1,"PME.AU":1,"NXT.AU":1,"FDN":1,"ETF.AU":1,"CPU.AU":1,"CAR.AU":1,"ALU.AU":1},"content_text":"The BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC) has performed strongly, rising by around 30% since the end of October 2023, as we can see in the chart below. So, is the ASX tech exchange-traded fund (ETF) still an investment opportunity after its rally? Let's take a look.  The ATEC ETF gives investors exposure to a range of technology-oriented market segments such as IT, consumer electronics, online retail and medical technology. The portfolio currently has 37 holdings. To give you a flavour of the types of companies in the portfolio, these are the biggest 10 positions by weighting:  Computershare Ltd (ASX: CPU) – 10.4% WiseTech Global Ltd (ASX: WTC) – 10% CAR Group Limited (ASX: CAR) – 9.9% Xero Ltd (ASX: XRO) – 9.4% REA Group Ltd (ASX: REA) – 7.9 NextDC Ltd (ASX: NXT) – 7.4% Seek Ltd (ASX: SEK) – 7.3% Altium Ltd (ASX: ALU) – 6.9% Pro Medicus Ltd (ASX: PME) – 4.7% TechnologyOne Ltd (ASX: TNE) – 4.2%  It's more expensive now When a share price has surged so much in a relatively short amount of time, it leads to a higher price/earnings (P/E) ratio, which undoubtedly makes the ATEC ETF more expensive. Share prices can't sustainably rise without good justification. Each business has its own earnings profile, but they all face the same higher interest rate environment, which is meant to push down valuations. It still could be a long time before interest rates start coming down, with inflation remaining stubbornly higher than central bankers would like. The great investor Warren Buffett once described why interest rates are so important for valuations:  The value of every business, the value of a farm, the value of an apartment house, the value of any economic asset, is 100% sensitive to interest rates because all you are doing in investing is transferring some money to somebody now in exchange for what you expect the stream of money to be, to come in over a period of time, and the higher interest rates are the less that present value is going to be.  So every business by its nature… its intrinsic valuation is 100% sensitive to interest rates.  But there's plenty of growth  Collectively, many of the ATEC ETF's holdings are delivering good growth. For example, in its recent FY24 half-year result, WiseTech reported free cash flow growth of 13% and statutory net profit after tax (NPAT) growth of 8%. Meanwhile, CAR Group grew adjusted NPAT by 34% to $163 million. Computershare is benefiting from the sustained high interest rates thanks to the large cash balance of clients it makes interest income on. Ultimately, businesses can justify a high price if the financial and operational performance keeps going well. Many of the ASX tech shares in this portfolio are among the best stocks in the country.  The ATEC ETF might fall in value in the shorter term (and it would be a better buy), but because of its underlying quality and continuing performance, I think we could see good performance over three or five years.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2426280440"}