It has become quite common in recent years to use ETFs to gain exposure to the technology industry, and for good reason. Over the past ten years or more, technology companies have been among the strongest performers, and their dominance doesn’t appear to be abating anytime soon. Here are five of the top technology ETFs to buy right now if you want to include some technology exposure in your portfolio but don’t want to invest directly in businesses like Apple and Microsoft.
- IShares US Technology, first (IYW)
- Invesco QQQ Trust (NASDAQ: QQQ)
- Vanguard Information Technology
- SPDR S&P 500 Tech (XLK)
- First Trust Dow Jones Internet Index
- PowerShares QQQ Trust
- KraneShares CSI China Internet ETF
- iShares PHLX Semiconductor ETF
iShares US Technology (IYW)
There are many of the top technology businesses on this list of the top 5 technology exchange-traded funds, making it one of the greatest places in the US to invest. When investing, it’s crucial to diversify your portfolio, and there are five excellent ways to do it. This list of the top 5 technology exchange-traded funds (ETFs) may be quite instructive for both novice and seasoned investors.
Invesco QQQ Trust
Managing $160.88 billion in assets
On the NASDAQ, the Invesco QQQ Trust provides exposure to tech stocks. This is one of the most well-liked ETF products, claims ETFdb.com. It was introduced in 1999, making it the second-longest-lasting product on this list.
Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), and Amazon (NASDAQ: AMZN) are three of the ETF’s 103 holdings, with a combined weight of 13.32 percent, 10.53 percent, and 6.24 percent, respectively.
Vanguard Information Technology
An exchange-traded fund called Vanguard Information Technology (VGT) invests in the equities of businesses in the technology sector. Intel Corporation, for example, is one of its top ten holdings. Alphabet Inc., a big player in the internet search engine sector, is another notable exposure for the portfolio.
Technology ETFs are becoming less common, whereas tech ETFs are growing in popularity. Tech ETFs follow an index made up of stocks from diverse tech and information services businesses including Cisco Systems and Microsoft.
SPDR S&P 500 Technology (XLK)
Technology is a dynamic sector, and not just IT companies are experiencing rapid expansion. You can profit from the technological boom with the aid of several tech ETFs without having to select specific stocks. With exposure to around 20% of the top 500 US technology businesses, the SPDR S&P 500 Technology (XLK) is one of the most well-liked options for investors in the industry.
First Trust Dow Internet Index
Since tech companies have performed well in recent years, investing in them is a desirable option. A technology ETF, such as First Trust Dow Jones Internet Index, is one way to gain exposure (FDN). This fund makes investments in large and mid-cap businesses that offer goods and services related to the internet. FDN has outperformed the S&P 500 by 1.5% over the past year. Additionally, it features a low volatility level and a 0.35 percent expenditure ratio.
PowerShares QQQ Trust
Exchange-traded funds (ETFs) that track the performance of equities in a specific industry include technology ETFs. With access to hundreds of equities, this can be a particularly helpful investment tool for those trying to diversify their portfolios. Our ranking of the top five technology exchange-traded funds is shown below.
KraneShares CSI China Internet ETF
43 holdings make up the KraneShares CSI China Internet ETF, which debuted in July 2013. Being the “only ETF available on the market that provides pureplay exposure to Chinese software and information technology enterprises, which is China’s response to the U.S. firms like Amazon.
This fund, which is focused on internet-oriented enterprises, consists primarily of large-size companies in terms of market cap. Tencent Holdings (HKEX:0700), Meituan (HKEX:3690), and Alibaba Group Holding (HKEX:9988), which together account for 9.37 percent, 9.37 percent, and 10.8 percent of the KraneShares CSI China Internet ETF’s top holdings, respectively.
iShares PHLX Semiconductor ETF
People often immediately think of things like CPUs and GPUs that power the processes and graphics in computers, tablets, and smartphones when they think about semiconductors, or “chips.”
But there are countless other uses for them, both modest and significant.
Semiconductor chips are used in a wide range of products, from satellite transponders and dishwashers to AC/DC power supplies, ultrasound scanners, and dishwashers. Additionally, they are precisely what will facilitate the development of the “Internet of Things,” which is the digital connectivity of commonplace items like refrigerators and alarm clocks.
The largest fund devoted to semiconductor companies, the iShares PHLX Semiconductor ETF (SOXX(opens in new tab), $315.68), features a focused portfolio of 30 leading company names.
Naturally, one of the most well-known brands of various processors is Intel. Nvidia is also a part of it; it is a popular graphics company best known for its gaming processors, but it has established a sizable data center business and is active in fields like artificial intelligence and driverless cars. Texas Instruments (TXN(opens in new tab)), whose analog chips are simpler yet have a wide range of applications in consumer goods and industrial systems, is another company owned by SOXX. The highest weighting at the present belongs to Broadcom (AVGO(opens in new tab)), whose products will aid in the transition of phone manufacturers to 5G technology. The assets invested in each stock of SOXX aren’t exactly proportional to their market capitalization because of the modified weighting system in place. The fund is still heavily influenced by major businesses, with weights of about 8% now held by AVGO, TXN, INTC, NVDA, and Qualcomm (QCOM(opens in new tab)).