Recent developments in the technology sector, such as the disruption caused by the Chinese startup DeepSeek (Reuters, 2025) and heightened volatility due to interest rate changes (Reuters, 2025), have undoubtedly captured the attention of investors. While such news often triggers short-term market turbulence, we want to reassure our investors in the 1nvest S&P500 Info Tech Feeder ETF (ETF5IT) that these fluctuations are well within the bounds of historical norms.
Resilience Amid Volatility
The ETF5IT tracks the S&P 500 Information Technology Index, providing exposure to some of the world’s most innovative and resilient technology companies. Since 2023, the ETF and broke with the S&P500 and delivered stunning returns even during periods of significant market stress, such as the COVID-19 pandemic, the Federal Reserve’s tightening cycles, and the Bank of Japan’s recent interest rate hike.
Historical data shows that this ETF’s price movements remained consistently within its established volatility bands. For instance, the carry trade unwinding following the BOJ’s rate hike and subsequent impacts on global tech stocks had only a transient effect on ETF5IT (Historical Volatility Data). Similarly, while DeepSeek’s innovations have introduced new uncertainties in the AI sector, they also highlight the dynamic nature of technology, where competition drives long-term growth and innovation. Currently, despite this upset this ETF is currently well inside its established volatility band. This is contrary what one would believe when reading the financial news.
Why Investors Can Stay Confident
- Diversification: ETF5IT’s exposure spans a wide range of technology companies, minimizing the impact of single-stock volatility.
- Structural Growth: The technology sector continues to benefit from secular trends such as cloud computing, artificial intelligence, and digital transformation (Tech Sector Outlook, 2025).
- Managed Risk: The ETF’s volatility is a natural characteristic of its underlying sector. Historical data underscores that short-term turbulence does not significantly derail long-term growth.
Stay Focused on the Long Term
While news headlines can spark temporary concerns, the long-term trajectory of the technology sector remains robust. The ETF5IT is designed to provide investors with exposure to this growth while mitigating the risks associated with individual stocks. By maintaining a disciplined, long-term perspective, investors can continue to benefit from the transformative potential of the technology sector.
We remain confident in the ETF’s ability to navigate these challenges and deliver value to investors over time.
