A look at five tech ETFs that fulfill various investor requirements.
It’s easy to become overwhelmed by the wealth of tech stocks on the market today. It’s a universal truth that there is money to be made in this market, but knowing where to look for the best stocks can seem like a daunting prospect for new or generalist investors.
Luckily, that is where a tech ETF, or exchange-traded fund, comes in. ETFs are marketable securities that track an index, a commodity, bonds or a collection of assets. Flexible and easy to trade, investors can buy and sell ETFs like stocks, usually through a brokerage account. Without further ado, here are five tech ETFs for investors to consider.
If you want to invest in tech’s major players…
iShares US Technology ETF (NYSEARCA:IYW)
With exposure to US electronics, computer software and hardware and informational technology companies, the iShares US Technology ETF covers all the big names on the US tech scene. To give you a taste, the ETFs’ top five holding are Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Facebook Class A (NASDAQ:FB), Alphabet Class A (NASDAQ:GOOGL) and Alphabet Class C. Investors in this ETF will be covered when it comes to American tech giants. However, investors who want to get a bit more creative with their holdings may want to look elsewhere.
If you want to get a bit more specialized…
PureFunds ISE Big Data ETF (NYSEARCA:BDAT)
If you have a general idea of which tech sector to invest in, a more specialized ETF may be the way to go. The PureFunds ISE Big Data ETF was created to offer the market a transparent vehicle to invest in the big data and analytics industry.
The top five holdings in this ETF are Opower (NYSE:OPWR), Marketo (NASDQ:MKTO), Qlik Technologies (NASDAQ:QLIK), Meditata Solutions (NASDAQ:MDSO) and Tableau Software (NYSE:DATA). If big data isn’t your thing, but the idea of a more specialized ETF still appeals, PureFunds also has a PureFunds ISE Cyber Security ETF (NYSEARCA:HACK) and a PureFunds ISE Mobile Payments ETF (NYSEARCA:IPAY). In a similar vein, the First Trust ISE Cloud Computing Index Fund (NYSEARCA:SKYY) also specializes, albeit in the cloud computing sector.
If you’re looking for a tech ETF with significant net assets…
Technology Select Sector SPDR (NYSEARCA:XLK)
The Technology Select Sector SPDR is another key tech ETF to consider. Indeed, its total net assets make it one of the largest in the entire industry. For instance, while the iShares US Technology ETF has $12,356.82 million in total net assets. The ETF has been trading at a 52-week range of $31.31 to $46.63 and is currently trading at the high side of this range. The fund’s market cap is $12.49 billion.
If you want to invest globally…
iShares Global Tech ETF (NYSEARCA:IXN)
There is no denying that North America is a hotbed of tech innovation, and many ETFs, like the iShares North American Tech ETF (NYSEARCA:IGM) and the iShares North American Tech-Software ETF (NYSEARCA:IGV), reflect that. However, there are also many excellent tech stocks outside of North America, and the iShares Global Tech ETF reflects this diversity. While almost 78 percent of the stocks held by this ETF are located in the US, it also represents significant investment in the Japanese, Taiwanese, South Korean, Chinese and German tech markets.
If you’re looking for a small-cap focus…
PowerShares S&P SmallCap Information Technology Portfolio (NASDAQ:PSCT)
The PowerShares S&P SmallCap Information Technology Portfolio could be a good option if you are looking for a small-cap focus in your ETF. Unlike the tech giants included in the iShares US Technology ETF, this fund keeps its focus on smaller companies. The portfolio is based on the S&P SmallCap 600® Capped Information Technology Index .
The companies included on this list are typically engaged in providing IT-related products and services, such as computer hardware and software, semiconductors and communication technologies. The portfolio’s top five investments are Heartland Payment Systems (NYSE:HPY), Blackbaud (NASDAQ:BLKB), Take-Two Interactive Software Inc (NASDAQ:TTWO), ViaSat (NASDAQ:VSAT) and Littelfuse (NASDAQ:LFUS).
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This is an update to an article originally published on February 4, 2016 on Technology Investing News.
Securities Disclosure: I, Morag McGreevey, hold no direct investment interest in any company mentioned in this article.