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Why tech seems poised for a breakout second quarter

Breathe. The first quarter roller-coaster ride has finished its round trip and markets are heading into the historically dull second quarter.

Since 1995, Q2 hasn't been the best time for markets generally, but it hasn't been the worst either. The S&P 500 has traded positive 60 percent of the time and returned around 2 percent on average. Meh.

So using Kensho, a tool that crunches historical market data, we looked for some of the more exciting seasonal trades.

We quickly found that tech has been a standout in the second quarter.

Over the last 20 years, the Nasdaq 100 index of tech heavyweights has reliably outperformed the S&P 500 and Dow Jones Industrial Average, trading positive more than 70 percent of the time and returning nearly 3.5 percent on average. The pattern has held over the last decade as well.

Among the best individual tech performers over the last year in Q2 have been Amazon and Expedia which have returned an average of nearly 9.9 percent and 8.8 percent respectively. But the heaviest quarterly hitters have been Chinese names. Search giant Baidu has returned more than 20 percent on average while online travel company, Ctrip.com, has gained nearly 15 percent.


And what else isn't dull? Sportswear, cigarettes and booze. Other reliable bets in the second quarter have been Under Armour, Reynolds American and beverage giant Constellation Brands.

Historically, the second quarter may not be terribly exciting, but it's not particularly safe either. Traditional safe havens like the dollar index and precious metals have underperformed. Over the last ten and twenty years both have averaged negative returns.

As always, past performance is no guarantee of future returns. But if this quarter follows history and you find yourself missing the excitement of the firstthese historical trades may be one way to spice up your portfolio.

DISCLOSURE: NBC Universal, the parent company of CNBC, is a minority investor in Kensho.