Best tech ETFs to buy in 2023
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Tech is a disruptive and innovative industry that offers growth investors serious scope for investment. Unlimited growth potential carries unlimited risk in turn. This page offers an overview of the best tech ETFs for investors with the requisite risk appetites.
What are the top tech ETFs to buy?
In the table below, our analysts have selected five of the best tech ETFs that you can invest in today. Continue scrolling further down the page to learn more about our top ETFs picks each in turn.
| # | ETF symbol | ETF name | Where to Trade |
|---|---|---|---|
| 1 | QQQ | Invesco QQQ ETF | Buy QQQ 77% of retail CFD accounts lose money. |
| 2 | VGT | Vanguard Information Technology ETF | Buy VGT 77% of retail CFD accounts lose money. |
| 3 | FDN | First Trust Dow Jones Internet Index ETF | Buy FDN 77% of retail CFD accounts lose money. |
| 4 | IBUY | Amplify Online Retail ETF | Buy IBUY 77% of retail CFD accounts lose money. |
| 5 | IXN | iShares Global Tech ETF | Buy IXN 77% of retail CFD accounts lose money. |
1. Invesco QQQ ETF (NASDAQGM: QQQ)
QQQ is a fund that seeks to align with the performance and yield of the NASDAQ-100 Index. The fund holds 100 of the largest and technologically innovative companies according to market capitalization. It currently ranks in the top 1% of large cap-growth funds on the market.
The fund’s top 10 holdings are tech giants: Apple, Microsoft, Amazon, Tesla, Alphabet, Google, Meta (formerly Facebook), Nvidia, Paypal, and Adobe. About 53% of the fund’s assets are allocated to its top 10 holdings, and this means that the performance of these companies is pivotal to the fund’s performance.
It should be reassuring to a new investor with a lower risk appetite that QQQ hedges its risk against the performance of the biggest tech companies on the market. Investing in blue-chip companies is a stable first foothold in the tech industry. Investors interested in the fund should do their own due diligence to best place their investment.
77% of retail CFD accounts lose money.
2. Vanguard Information Technology ETF (NYSEARCA: VGT)
VGT seeks to track and replicate the performance of a benchmark index that measures the return on investment of stocks in the information technology sector. It is a passively managed fund that is suited to long term investors. The fund currently holds stocks in 362 companies in the tech sector.
The fund’s top 10 holdings are allocated approximately 60% of its total assets. If you are interested in investing in VGT, you will be reassured to learn that the top 10 holdings comprise: Apple, Microsoft, Nvidia, Visa, Mastercard, Broadcom, Adobe, Cisco, Accenture, and Salesforce. All established companies that are market leaders in the industry.
Long-term investors can passively invest in VGT with the knowledge that they are investing in the creme de la creme companies within the industry. Consistent growth of market giants is at the crux of overall investor interest in the tech sector. Therefore, VGT is a relatively stable ETF to start your journey in this disruptive industry.
77% of retail CFD accounts lose money.
3. First Trust Dow Jones Internet Index ETF (NYSEARCA: FDN)
FDN is the only fund on the market that is based on the Dow Jones Internet Composite Index. The fund has 42 holdings that constitute the most actively traded stocks of US companies in the internet industry. Due to its low number of holdings, the ETF carries more risk and is suited to investors with larger risk appetites.
The fund applies a strict criteria that must be met by companies it includes in its holdings: they must generate the majority of their sales/ revenue from the internet, they must have been trading on the market for at least 3 months, and they must have had at least 3 months worth of an average float-adjusted market cap of $100 million.
This strict criteria hedges specific-holding risks resulting from a smaller number of total holdings. Investors appreciate that the top 10 holdings are allocated approximately 54% of the fund’s total assets and these holdings are notable market players: Amazon, Facebook (formerly Meta), Cisco, Alphabet (Class A and C), Salesforce, Netflix, Paypal, Snowflake, and Adobe.
77% of retail CFD accounts lose money.
4. Amplify Online Retail ETF (NYSEARCA: IBUY)
IBUY is a fund that corresponds with the performance and yield of the EQM Online Retail Index. Its 79 holdings are stocks of publicly traded companies with significant revenue from online trading business. It is the age of e-commerce and tech investors are largely attracted to this upcoming space.
The fund allocates approximately 21% of its net assets to its top 10 holdings. These are: Expedia, Booking.Com, Amazon, Liquidity SVCS, Airbnb, Groupon, Uber, Tripadviser, Copart, Solo Brands. Since these are some of the top names in the ecommerce market, IBUY is a great stepping stone for new investors to the space.
The fund aims to result in a portfolio that enhances potential for capital appreciation. This strategy suits long-term investors seeking a passively managed fund that prioritises profit maximisation in the long run.
77% of retail CFD accounts lose money.
5. iShares Global Tech ETF (NYSEARCA: IXN)
IXN is a fund that seeks to track the results of an index comprising global equities in the tech industry. The fund has 132 holdings that are global companies focused on information technology, electronics, and/or computer hardware and software.
Socially conscious investors are attracted to the fund’s high ESG rating. IXN is wholly dedicated to its ESG initiatives. This is a major point of appeal for investors interested in the fund as IXN’s performance is likely to remain resilient against ESG-related disruptions.
The fund allocates approximately 58% of its assets across its top 10 holdings. Notable holdings in the top 10 include Apple, Microsoft, Nvidia, Visa, Samsung, and Adobe – all reputed blue-chip companies that are ideal for long-term investors seeking a relatively stable investment.
77% of retail CFD accounts lose money.
Where to buy the best tech ETFs
Registering with an online broker is the first step to investing in an ETF. They are like individual stocks, you can sell or buy ETFs as you wish. The table below features our pick of the best brokers that offer access to tech ETFs.
77% of retail CFD accounts lose money.
What is a tech ETF?
It’s an exchange traded fund that holds shares in companies within the tech industry. Companies in this industry focus on the production of electronics, innovation of software computers, or other services relating to information technology. The sector is pivotal to the overall growth of the global economy.
Investors flock to tech stocks as they comprise some of the largest companies in the market. Companies like Amazon, IBM, Google, Microsoft, and Meta (formerly Facebook) drive the economy and their stocks are increasingly valuable to growth investors. Tech ETFs are thus an ideal first step through the door into investing in the sector.
Are tech ETFs a good investment?
Tech companies are innovative, disruptive, and move the market. As a result, the tech industry is the most attractive source of investment in any economy. Untapped growth potential indicates high risk investments that can entail high rewards if you do your due diligence.
When tech companies introduce new lines of business, they simultaneously create sensation that drives growth in the market. Investors are wise to seek tech ETFs with stocks of companies that heavily invest into research and development.
The element of risk is withstanding. Any new investor must be prepared for the risk of investing in companies that undertake projects with a speculative view of future growth. You should best place your investment by staying on top of sector news using the links below.
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