Several best tech ETFs offer investors exposure to the IT sector.
Investors are reluctant to pay financial advisors high management fees to allocate their funds.
However, many are wary of stock selection because they anticipate big financial losses or poor performance due to a few bad decisions.
ETFs are increasingly used for passive investment methods for this reason. An investor can easily build an ETF portfolio with a few clicks on a digital interface.
This technique gives investors exposure to a diverse portfolio of thousands or tens of thousands of companies.
ETFs trade like stocks, with brokerage fees and a small yearly management fee.
We mostly seek exposure to the world’s biggest and best companies. However, we may have considered learning about real estate investment trusts or the technology industry.
The best tech ETFs are popular for various reasons. Artificial intelligence is making a big impact in investment, increasing interest and urging stakeholder participation. High-performing technology equities offer exposure to this dynamic.
Innovation is accelerating, and some large technological firms are seeing strong financial growth.
As shown by your search for the best tech ETFs, you clearly knew the subject. Let’s analyze several relevant funds.
As usual, these assertions are not advice. They provide a brief overview of personal reflections to start a conversation.
Before you proceed, you might also want to know the best airline ETFs, the best defense ETFs, and the best artificial intelligence ETFs.
Here are the best technology ETFs that you should invest in.
If you want to invest as an expat or high-net-worth individual, you can email me (advice@adamfayed.com) or use these contact options.
Table of Contents
iShares Semiconductor ETF (NASDAQ:SOXX)
The primary aim of the iShares Semiconductor ETF (NASDAQ:SOXX) is to mirror the performance of an index composed of U.S. stocks from the semiconductor industry (the ICE Semiconductor Index).
On July 10, 2001, the fund began accepting investments.
The iShares Semiconductor ETF (NASDAQ:SOXX) has 30 holdings, an expense ratio of 0.35%, and will expire on August 23, 2023.
When it comes to ETFs, this is one of the top performers.
The iShares Semiconductor ETF (NASDAQ:SOXX) is heavily invested in Broadcom Inc. (NASDAQ:AVGO), a semiconductor corporation headquartered in Santa Clara, California.
Broadcom Inc. (NASDAQ:AVGO) beat Q2 non-GAAP EPS forecasts of $0.18 and sales estimates of $8.73 billion published on June 1 by $20 million.
A total of 5.6 million common shares were repurchased by the corporation for $3.420 million.
72 hedge funds were long AVGO at the end of the second quarter, according to Insider Monkey’s database, with Rajiv Jain’s GQG Partners holding a significant position of 1.10 million shares, valued at $955.7 million.
ARK Next Generation Internet ETF (NYSE:ARKW)
The ARK Next Generation Internet ETF (NYSE: ARKW) has demonstrated exceptional performance within the technology sector.
The ARK Next Generation Internet ETF (NYSE: ARKW) is a dynamically managed exchange-traded fund that seeks to allocate investments towards the domain of next-generation internet.
The constituent companies of ARKW exhibit a focused emphasis on the migration of technological infrastructure towards cloud-based platforms.
The ETF was established on September 30, 2014. As of July 31, 2023, the ETF’s net assets are valued at $1.65 billion, and it provides an expense ratio of 0.88%.
The ARK Next Generation Internet ETF (NYSE: ARKW) invests heavily in California-based TV streaming provider Roku, Inc. Roku, Inc. (NASDAQ:ROKU) reported second-quarter earnings on July 27. It had $847 million in revenue and -$0.76 GAAP EPS.
These statistics exceeded Wall Street expert projections by $0.51 and $72.47 million.
The second quarter of 2023 saw 73.5 million active accounts, up 1.9 million from the previous quarter. Roku’s streaming hours have reached 25.1 billion, a 4.4 billion-hour annual increase.
According to Insider Monkey’s second quarter database, 29 hedge funds had a bullish outlook on Roku, Inc. (NASDAQ:ROKU), up from 27 in the previous quarter.
ARK Investment Management, led by Cathie Wood, dominates the company with over 12 million shares worth $764.85 million.
iShares U.S. Technology ETF (NYSE:IYW)
The primary goal of the iShares U.S. Technology ETF (NYSE:IYW) is to achieve a similar investment performance as the Russell 1000 Technology RIC 22.5/45 Capped Index, which is composed of shares from the U.S. technology sector.
The provided index provides investors with access to American companies operating in the fields of electronics, computer software and hardware, and information technology. The iShares U.S. Technology ETF (NYSE:IYW) was launched on May 15, 2000.
As of August 24, 2023, the fund possesses a portfolio consisting of 136 equities, with a net asset value of $10.8 billion.
The expense ratio of this particular entity is 0.39%. The iShares U.S. Technology ETF (NYSE:IYW) has demonstrated exceptional performance within the technology sector.
The iShares U.S. Technology ETF (NYSE:IYW) includes Microsoft Corporation (NASDAQ:MSFT) as one of its prominent holdings.
The finalization of the acquisition of Activision Blizzard, Inc. (NASDAQ:ATVI) by Microsoft Corporation (NASDAQ:MSFT) for a sum of $69 billion is anticipated to occur in early October.
Microsoft has recently submitted a revised agreement to the antitrust regulator in the United Kingdom.
There exists a possibility that the European Union may require Microsoft to submit the accord again; however, the current status of this conclusion remains ambiguous.
Based on the second quarter database of Insider Monkey, it was observed that there was an increase in the number of hedge funds expressing a positive outlook on Microsoft Corporation (NASDAQ:MSFT).
Specifically, the number of bullish hedge funds rose from 289 in the previous quarter to 300.
The Bill & Melinda Gates Foundation Trust holds the largest interest in the corporation, possessing 39.2 million shares valued at $13.3 billion.
ARK Fintech Innovation ETF (NYSE:ARKF)
The goal of the actively managed ARK Fintech Innovation ETF (NYSE:ARKF) is long-term capital appreciation through investment in local and foreign stocks of companies engaged in revolutionary financial technology.
The cost ratio of the ARK Fintech Innovation ETF (NYSE:ARKF), which was launched on February 4, 2019, is 0.75%.
Approximately 35–55 stocks make up its portfolio. One of the best performing technology exchange traded funds (ETFs) this year has been the ARK Fintech Innovation ETF (NYSE:ARKF).
Coinbase Global, Inc. (NASDAQ:COIN), a leading cryptocurrency exchange, is the largest holding of the ARK Fintech Innovation ETF (NYSE:ARKF).
Circle is the firm that developed USD Coin, a stablecoin tethered to the US dollar, and on August 21 Coinbase Global, Inc. (NASDAQ:COIN) announced that it will be investing in Circle. Stablecoins have gained a proponent in Coinbase Global, Inc. (NASDAQ:COIN), which has taken this step to show its support.
Insider Monkey’s database shows that there were 27 hedge funds holding Coinbase Global, Inc. (NASDAQ:COIN) in the second quarter, down from 28 in the first quarter.
With 12.12 million shares worth $867.3 million, Cathie Wood’s ARK Investment Management is the company’s largest shareholder.
VanEck Semiconductor ETF (NASDAQ:SMH)
The objective of the VanEck Semiconductor ETF (NASDAQ: SMH) is to replicate the price and yield performance of the MVIS® US Listed Semiconductor 25 Index.
The purpose of this index is to observe and evaluate the overall performance of enterprises involved in the manufacturing and production of semiconductors, as well as the equipment used in this industry.
The establishment of the VanEck Semiconductor ETF (NASDAQ:SMH) occurred on December 20, 2011.
As of August 24, 2023, the fund’s net assets amount to $9.63 billion, accompanied by an expense ratio of 0.35%. This ETF has exceptional performance within the technology sector.
The VanEck Semiconductor ETF (NASDAQ:SMH) includes Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM).
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) reported second-quarter earnings on July 20.
The company reported $15.68 billion in sales and $1.14 GAAP EPADR. These statistics exceeded Wall Street expert projections by $0.06 and $300 million.
The second quarter Insider Monkey database showed an increase in hedge funds favoring Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM).
There were 121 optimistic hedge funds, up from 102 the previous quarter. Its largest shareholder is Jean-Marie Eveillard’s First Eagle Investment Management, with 9 million shares worth $914 million.
SPDR NYSE Technology ETF (NYSE:XNTK)
Prior to fees and charges, the SPDR NYSE Technology ETF (NYSE:XNTK) seeks investment returns that closely match the NYSE Technology Index.
IT stocks are included in this consumer discretionary index. On August 24, 2023, the ETF had a 0.35% cost ratio. It has 35 stocks.
The SPDR NYSE Technology ETF (NYSE:XNTK) had strong performance in 2023 as a technology-focused ETF.
The SPDR NYSE Technology ETF (XNTK), traded on the New York Stock Exchange, includes Meta Platforms, Inc., (NASDAQ: META).
Due to its strong second quarter results and optimistic outlook, Wall Street analysts praised Meta Platforms, Inc. (NASDAQ:META).
Citi analyst Ronald Josey restated a Buy recommendation on Meta Platforms, Inc. [NASDAQ:META] on July 27th. Advertisers like Sponsored Reels and Click-to-WhatsApp, the author noted.
The second quarter Insider Monkey database showed 225 hedge funds holding long positions in Meta Platforms, Inc. (NASDAQ:META), up from 220 funds.
With 8.5 million shares worth $2.45 billion, Chase Coleman’s Tiger Global Management owns the most.
SoFi Web 3 ETF (NASDAQ:TWEB)
SoFi Web 3 ETF (NASDAQ:TWEB) aims to replicate the SoFi Solactive ARTIS® Web 3.0 Index’s financial performance without fees. US, developed, and South Korean stock exchanges are tracked by the index.
The index invests in Big Data & AI, Blockchain Technology, Metaverse, and NFT & Tokenization. On August 8, 2022, SoFi Web 3 ETF (NASDAQ:TWEB) was founded.
The fund manages $1.35 million and has a 0.59% cost ratio. The ETF above performed well in technology in 2023.
DraftKings Inc., a prominent American digital sports entertainment and gaming firm listed on the NASDAQ under the ticker symbol DKNG, holds the position of the largest asset within the SoFi Web 3 ETF (NASDAQ:TWEB).
DraftKings Inc. (NASDAQ:DKNG) released its Q2 financial results on August 3, revealing a non-GAAP EPS of $0.14 and a revenue of $875 million.
These figures surpassed market estimates by $0.28 and $112.16 million, respectively.
Based on the second quarter database of Insider Monkey, it was observed that the number of hedge funds with long positions in DraftKings Inc. (NASDAQ:DKNG) increased from 37 funds in the previous quarter to 40 funds.
Final Thoughts
The best tech ETFs provide a strong choice for technology investors wanting exclusive exposure.
As always, these funds’ historical results do not guarantee future performance.
Tech titans in the portfolio have produced positive results, but that does not guarantee future success. Investment requires understanding this element.
One must assess their risk tolerance and understand the risks of buying Exchange-Traded Funds. These ETFs are projected to be more volatile than S&P 500 blue-chip funds.
To start passive investing with ETFs instead of individual equities, the following ETFs are advised. ETFs are beneficial for new investors.
Private banking clients in search of top-performing investment options often consider the best tech ETFs, as they offer diversified exposure to the technology sector within their investment funds.
Pained by financial indecision? Want to invest with Adam?
Adam is an internationally recognised author on financial matters, with over 760.2 million answer views on Quora.com, a widely sold book on Amazon, and a contributor on Forbes.
