Big investors, unfazed by techs' roller coaster, buy 'FANG' stocks
By David Randall
NEW YORK (Reuters) - Large investors, whose high exposure to large-cap technology stocks boosted their returns during the first quarter of the year, are doubling down on their investments even as stocks like Apple Inc (AAPL.O: Quote) and Facebook Inc (FB.O: Quote) stumble.
Fund managers such as T Rowe Price and Federated Investors, who were already overweight the sector, said they were buying beaten-down so-called 'FANG' stocks – Facebook, Amazon.com Inc (AMZN.O: Quote), Netflix Inc (NFLX.O: Quote) and Google-parent Alphabet Inc (GOOGL.O: Quote) - during a two-day selloff that marked the largest tech sector decline in nearly a year.
Google, Apple and other large tech stocks rose modestly in morning trading Tuesday.
Jeff Rottinghaus, portfolio manager of the T Rowe Price Large-Cap Core Equity fund PAULX.O, said he has been adding money to existing tech holdings such as Facebook and Amazon because they are positioned to continue to grow over the next few years regardless of the direction of the overall economy.
With other secular growth stories hard to find, "It's getting to the point where you have to say, 'What else do you want me to own?'" he said, adding that these companies continue to be up significantly year-to-date despite recent declines.
Analysts expect the S&P 500 technology index .SPLRCT to grow its earnings by 12.4 percent this year, better than the S&P 500's 11.6-percent expected growth, according to Thomson Reuters I/B/E/S.
About 40 percent of the stocks in the S&P 500 information technology index rose on Monday, including Qualcomm Inc (QCOM.O: Quote) and International Business Machines Corp (IBM.N: Quote), which have lagged in 2017.
"This tech selloff is a great buying opportunity," said Navellier & Associates Chairman Louis Navellier, who bought shares of Micron Technology Inc (MU.O: Quote), Applied Materials Inc (AMAT.O: Quote), Arista Networks Inc (ANET.N: Quote) and STMicroelectronics NV (STM.PA: Quote). Continued...