Inside The Surge

The combination of strong corporate earnings and the soaring FAANG stocks — facebook (FB – Free Report) , Amazon (AMZN – Free Report) , Apple (AAPL – Free Report) , Netflix (NFLX – Free Report) , and Alphabet (GOOGL – Free Report) — has been the major driver of the stellar performance. Notably, cutting-edge technology such as autonomous cars, cloud computing, gaming, wearables, VR headsets, drones, virtual reality devices, Internet of Things (IoT) and artificial intelligence are fueling exceptional growth in the sector, offsetting struggling traditional businesses like PCs and smartphones.

Encouraging fundamentals like improved overseas demand and a rising interest rate scenario are also adding to the strength. Further, Trump's new tax structure, which allows companies to bring back cash held overseas at lower rates, are propelling the stocks higher. Per Moody's, the top five U.S. hoarders are from the technology sector, namely Apple, Microsoft, Cisco (CSCO – Free Report) Alphabet, and Oracle (ORCL – Free Report) , which hold 88% of their money overseas.

Moreover, the industry is benefiting from an astronomical surge in cryptocurrencies such as bitcoin that has pushed semiconductor stocks to record highs. This is because mining of cryptocurrencies needs the usage of semiconductors. A hardware known as an ASIC (Application-Specific Integrated Circuit) has been designed exclusively for mining bitcoin.

Given this, investors might want to tap the space with the top-performing technology ETFs and stocks of this year. For them, we have highlighted five funds and stocks that are poised to perform well in the New Year.

Best ETFs

ARK Innovation ETF ARKK

This actively managed fund offers exposure to companies that rely on or benefit from the development of new products or services, technological improvements and advancements in scientific research relating to the genomic, industrial innovation or Web x.0.