5 Best Technology ETFs To Buy

In this article, we discuss 5 best technology ETFs to buy. If you want to read our discussion on the technology market, head over to 12 Best Technology ETFs To Buy. 

5. Fidelity MSCI Information Technology Index ETF (NYSE:FTEC)

5 Year Performance as of September 12: 112.90%

Launched in October 2013, the Fidelity MSCI Information Technology Index ETF (NYSE:FTEC) aims to mimic the investment returns of the MSCI USA IMI Information Technology 25/50 Index. The ETF allocates a minimum of 80% of its assets to securities found in the MSCI USA IMI Information Technology 25/50 Index, while employing a representative sampling indexing approach. Currently, the total assets for the portfolio amount to $7.27 billion, while the expense ratio is maintained at 0.08%. It is one of the top technology ETFs to buy. 

Adobe Inc. (NASDAQ:ADBE) is a significant holding of Fidelity MSCI Information Technology Index ETF (NYSE:FTEC). Adobe Inc. (NASDAQ:ADBE) is a leading provider of software solutions under three segments – Digital Media, Digital Experience, and Publishing and Advertising. According to Insider Monkey’s second quarter database, a total of 109 hedge funds were bullish on Adobe Inc. (NASDAQ:ADBE), as compared to 99 hedge funds that had invested in the company during the past quarter.

Polen Global Growth Strategy said this about Adobe Inc. (NASDAQ:ADBE) in its second quarter 2023 investor letter: 

“While Adobe Inc. (NASDAQ:ADBE)’s growth has moderated from high teens to low teens during the past couple of years, Adobe continues to deliver solid growth, and management raised its full-year guidance during the most recent quarter. The company also introduced some AI product enhancements, which seem to have helped shift the narrative from “AI is going to be bad for Adobe” to “AI is going to be good.” Finally, the company continues to work towards the Figma acquisition.”

4. Vanguard Information Technology Index Fund (NYSE:VGT)

5 Year Performance as of September 12: 113.44%

Vanguard Information Technology Index Fund (NYSE:VGT) is a passively managed ETF that aims to replicate the performance of the MSCI US Investable Market Information Technology 25/50 Index.  The ETF achieves this by employing a full-replication approach and a sampling strategy, when appropriate. Vanguard Information Technology Index Fund (NYSE:VGT) includes companies from the technology sector including those involved in electronics, computing, and applied sciences. As of July 2023, the total net assets for the ETF exceed $63.2 billion, while the expense ratio is maintained at 0.10%. It is one of the premier technology ETFs to watch.

Microsoft Corporation (NASDAQ:MSFT) is a significant holding of Vanguard Information Technology Index Fund (NYSE:VGT). Microsoft Corporation (NASDAQ:MSFT) is a market leading tech company. Be it personal devices, laptops, gaming consoles, licensing software services, or cloud-based solutions, Microsoft Corporation (NASDAQ:MSFT) is heavily involved across all things tech. According to Insider Monkey’s second quarter database, 300 hedge funds were bullish on Microsoft Corporation (NASDAQ:MSFT). In comparison, 289 hedge funds had invested in the company during the preceding quarter. 

Mairs & Power Growth Fund had this to say about Microsoft Corporation (NASDAQ:MSFT) in its second quarter 2023 investor letter:

“Regarding stock selection in the first half, Nvidia (NVDA) was a massive outperformer, up 189.54%. Amazon and Microsoft Corporation (NASDAQ:MSFT) were also positive contributors, up 55.19% and 42.66%, respectively. All three stocks benefited from a renewed interest in growth stocks by investors in the first half of the year.”

3. Technology Select Sector SPDRFund (NYSE:XLK)

5 Year Performance as of September 12: 127.74%

Introduced in December 1998, the Technology Select Sector SPDRFund (NYSE:XLK) aims to replicate the performance of the Technology Select Sector Index, which is a representation of the technology sector within the S&P 500 Index. The ETF offers exposure to tech companies involved in hardware, software, semiconductors, and other IT services. As of September 13, the ETF had nearly $50 billion in assets under management, while featuring an expense ratio of 0.10%. 

Apple Inc. (NASDAQ:AAPL) is one of the largest holdings of Technology Select Sector SPDRFund (NYSE:XLK). Apple Inc. (NASDAQ:AAPL) is a market leader in the development of personal computers, gadgets, and cloud-services. The company also offers value-added services under subscription models. According to Insider Monkey’s second quarter database, 135 hedge funds were bullish on Apple Inc. (NASDAQ:AAPL). This number increased from 131 hedge funds from the preceding quarter. 

Choice Equities Capital Management said this about Apple Inc. (NASDAQ:AAPL) in its second quarter 2023 investor letter:

“Dramatic valuation differences across market cap sizes continue. This has been the case for some time now. Perhaps I have spent too much time discussing these dichotomies, as generally, I feel like if we pick the right stocks and manage market exposures thoughtfully, our equities- oriented portfolio will prosper across various market cycles. However, when markets become as lopsided as they have lately, I feel additional discussion on the market environment is worthwhile, if only to help highlight the opportunities that are available and the likely path forward. I expect future discussions to soon be focused again on our moderately concentrated portfolio. But for now, let’s take one last in-depth look at how far reaching these valuation dichotomies have again become.(Please note: charts that accompany the following can be found in the Appendix.)”

2. iShares Semiconductor ETF (NASDAQ:SOXX)

5 Year Performance as of September 12: 162.99%

Introduced in July 2001, the iShares Semiconductor ETF (NASDAQ:SOXX) aims to mimic the performance of the ICE Semiconductor Index, which includes companies focused on the semiconductor sector. As of September 13, the total net assets of the ETF are valued at nearly $9 billion, while featuring an expense ratio of 0.35%. iShares Semiconductor ETF (NASDAQ:SOXX)’s portfolio comprises 30 stocks. It is one of the best tech ETFs to buy.

Broadcom Inc. (NASDAQ:AVGO) is a prominent holding of the iShares Semiconductor ETF (NASDAQ:SOXX). Broadcom Inc. (NASDAQ:AVGO) specializes in the manufacture of semiconductor devices and analog products within two major segments – Semiconductor Solutions and Infrastructure Software. According to Insider Monkey’s second quarter database, 72 hedge funds were bullish on Broadcom Inc. (NASDAQ:AVGO). This number remained unchanged from the past quarter. 

Aristotle Atlantic Partners made the following comment about Broadcom Inc. (NASDAQ:AVGO) in its Q2 2023 investor letter:

“Broadcom contributed to outperformance, as the company is seen as a key beneficiary of the investment in generative Artificial Intelligence (AI) and Large Language Models (LLM). The company’s Application-Specific Integrated Circuit (ASIC) chips are being custom-built for customers to use in their data centers for accelerated computing. Broadcom’s networking chipsets are also expected to see increased levels of demand, as customers increase investments to enable the high-speed data transfer required by advanced AI training and inference. The company also announced a new multi-year supplier relationship with Apple, the company’s largest customer.”

1. VanEck Semiconductor ETF (NASDAQ:SMH)

5 Year Performance as of September 12: 181.78%

VanEck Semiconductor ETF (NASDAQ:SMH) was launched in December 2011 to track the performance of the MVIS US Listed Semiconductor 25 Index. The index serves as a reflection on the performance of tech companies engaged in the semiconductor business. As of September 13, the total net assets of the ETF amounted to $9.84 billion, while the fund featured an expense ratio of 0.35%. 

NVIDIA Corporation (NASDAQ:NVDA) is one of the top holdings of VanEck Semiconductor ETF (NASDAQ:SMH). NVIDIA Corporation (NASDAQ:NVDA) is a leading manufacturer of graphic chipsets and software solutions across the globe. According to Insider Monkey’s second quarter database, 175 hedge funds were bullish on NVIDIA Corporation (NASDAQ:NVDA), in comparison to the 132 hedge funds from the past quarter. 

Mairs & Power Growth Fund said this about NVIDIA Corporation (NASDAQ:NVDA) in its second quarter 2023 investor letter:

“Regarding stock selection in the first half, NVIDIA Corporation (NASDAQ:NVDA) was a massive outperformer, up 189.54%. Amazon and Microsoft were also positive contributors, up 55.19% and 42.66%, respectively. All three stocks benefited from a renewed interest in growth stocks by investors in the first half of the year. Nvidia is the leading provider of processors used for artificial intelligence (AI) computation for both learning and inferencing, and its stock rallied significantly on a massive earnings report in the first quarter as cloud data center companies invested heavily in AI.”

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