Top Tech ETFs Right Now

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Contributor, Benzinga
November 3, 2023

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There’s just no stopping technology. Every industry heavily depends on it.

However, in the investment world, some tech companies perform well while others don’t. If you are an investor who wants to invest in the tech sector with minimal risk, then technology exchange-traded funds (ETFs) might be a safe bet. 

Unlike direct investments in stocks, an ETF allows you to invest in the total technology market by bundling the assets of several different companies into 1 product. You can invest in the ever-changing tech industries without doing homework on individual stocks.

Check out Benzinga’s list of ETFs to make an informed decision about your next tech investment.

Best Tech ETFs Right Now - Biggest Gainers and Losers

Within the same sector, some ETFs perform worse than others due to overexposure to a particular stock that has severely tanked and vice versa. 

The expense ratio for these funds ranges from 0.08% to 1.25%. They also happen to be volatile due to the high risk/reward profile of the technology sector. 

Here are tech ETF investments — funds that were hit the most and least:

Stock Movers

Loser

Session: Nov 30, 2023 4:00PM EST - Dec 1, 2023 3:59PM EST

Premarket Tech ETFs

ETFs can be transacted before general market timing. Premarket runs from 4 a.m. to 9:30 a.m. ET. This activity has limited volume and liquidity, so large bid-ask spreads are prevalent. 

Aftermarket Tech ETFs

ETFs can also be transacted after the general market timings. Aftermarket is open 4 p.m. to 8 p.m. ET. In the aftermarket, there is less trade volume and large bid-ask spreads — which implies higher volatility. You can expect short-term profits by purchasing during the aftermarket.

Why Invest in Tech ETFs?

Tech ETFs are closed-ended mutual funds traded on exchanges that invest in companies within the technology sector. The key advantages of investing in a sector through an ETF are low ticket size, diversification and tax efficiency compared to open-ended mutual funds and other asset classes.

There are 5 practical reasons why you should consider investing in technology ETFs:

Lower Risk Through Diversification

Investing directly in individual stocks could lead to concentration risk. Investing in tech ETFs can give you exposure to a well-performing and diversified set of tech stocks. Investment professionals skillfully handpick a range of stocks, which ensures that your eggs are in different baskets.

Easy Liquidity

Tech ETFs trade on the exchanges, so they can be bought and sold during market hours. Unlike individual stocks, the volume of buyers and sellers does not tend to dry up while trading in ETFs.

Extremely Low Maintenance

If you invest directly, constant monitoring and analysis of the stocks in the respective fields can take a lot of time and effort. ETFs have dedicated fund managers and research analysts to do that work for you.

Lower Fees Compared to Mutual Funds

Every professional fund manager charges a certain fee to manage your funds. This commission can sometimes run you dry, especially if you haven’t accounted for this hidden investment. There’s a stark difference in the cost of ETFs compared to mutual funds. The expense ratios for ETFs range from 1.10% to 1.25% of the fund’s earnings. 

Ideal for Investing in Small Amounts

If you’re a young investor or completely new to investing, it’s ideal to start small. Investing in ETFs lets you spend as little as the price of 1 share — similar to penny stocks. This makes ETF investments accessible to the average wage earner.

Best Online Brokers for Tech ETFs

We’ve shortlisted a list of few quality online brokers ready to help you invest and trade in tech ETFs.

Reaping the Benefits of Tech ETFs

Investing in tech ETFs is already a step in the right direction if you’re hoping to profit from the booming technology sector.

Instant diversification and low fees make tech ETFs ideal for first-time investors or seasoned pros interested in the tech sector as opposed to specific companies. Connect with one of our recommended brokers to invest in tech ETFs today.

Frequently Asked Questions

Q

Which tech ETF is better than QQQ?

A

Some popular tech ETFs that investors may consider as alternatives to QQQ include XLK (Technology Select Sector SPDR Fund), VGT (Vanguard Information Technology ETF), and IYW (iShares U.S. Technology ETF).

Q

Are tech ETFs a good buy?

A

Tech ETFs can be a good buy for investors looking to gain exposure to the technology sector. These funds offer diversification across multiple tech companies, reducing the risk associated with investing in individual stocks. The technology sector has shown strong growth potential in recent years, making tech ETFs an attractive investment option.

Q

Which ETF has the most tech stocks?

A

The ETF that has the most tech stocks is the Invesco QQQ Trust ETF (QQQ). This ETF tracks the performance of the Nasdaq-100 Index, which is composed of the largest non-financial companies listed on the Nasdaq Stock Market. As the Nasdaq Stock Market is known for its heavy concentration of technology companies, QQQ has a significant allocation to tech stocks.