What is the best technology ETF to invest in 2023?
Technology ETFs are the best-performing funds in 2023, driven by a boom in AI. The top-performing ETF of 2023 is iShares Expanded Tech Software Sector ETF (IGV), with a year-to-date (YTD) return of 55.22%.
These are VanEck Vectors Semiconductor ETF SMH, Invesco NASDAQ 100 ETF QQQM, Communication Services Select Sector SPDR Fund XLC, Vanguard Mega Cap Growth ETF MGK, and Vanguard Consumer Discretionary ETF VCR. These funds are likely to continue outperforming should the existing trends prevail.
| Ticker | Name | 5-year return |
|---|---|---|
| SOXX | iShares Semiconductor ETF | 31.31% |
| XSD | SPDR S&P Semiconductor ETF | 28.96% |
| PSI | Invesco Semiconductors ETF | 27.97% |
| XLK | Technology Select Sector SPDR Fund | 26.98% |
| Fund | Expense Ratio |
|---|---|
| BlackRock Technology Opportunities Fund (BSTSX) | 1.17% |
| Columbia Global Technology Growth Advisor (CTYRX) | 0.93% |
| Fidelity Select Semiconductors Portfolio (FSELX) | 0.69% |
| T. Rowe Price Science & Technology (PRSCX) | 0.84% |
VGT - Performance Comparison. In the year-to-date period, QQQ achieves a 3.49% return, which is significantly lower than VGT's 4.01% return. Over the past 10 years, QQQ has underperformed VGT with an annualized return of 18.38%, while VGT has yielded a comparatively higher 20.53% annualized return.
| Symbol | Name | 5-Year Return |
|---|---|---|
| PSI | Invesco Semiconductors ETF | 26.92% |
| XSD | SPDR S&P Semiconductor ETF | 26.59% |
| IYW | iShares U.S. Technology ETF | 26.10% |
| ITB | iShares U.S. Home Construction ETF | 25.77% |
| Symbol | Name | Dividend Yield |
|---|---|---|
| OARK | YieldMax Innovation Option Income Strategy ETF | 47.55% |
| CONY | YieldMax COIN Option Income Strategy ETF | 38.71% |
| RATE | Global X Interest Rate Hedge ETF | 32.98% |
| MAXI | Simplify Bitcoin Strategy PLUS Income ETF | 31.40% |
| ETF | Assets under management | Expense ratio |
|---|---|---|
| Vanguard Information Technology ETF (VGT) | $60 billion | 0.10% |
| Schwab US Dividend Equity ETF (SCHD) | $52 billion | 0.06% |
| Vanguard Total Stock Market ETF (VTI) | $348 billion | 0.03% |
| Vanguard Total International Stock ETF (VXUS) | $63 billion | 0.07% |
- Issuer: VanEck.
- Assets under management: $9.4 billion.
- Ten-year performance: 24.0%
- Expense ratio: 0.35%
1. Invesco QQQ Trust (NASDAQ:QQQ) The Invesco QQQ Trust offers exposure to tech stocks on the NASDAQ. According to ETFdb.com, this is one of the most popular ETF products.
Which ETF has the most tech stocks?
Technology Select Sector SPDR ETF (XLK)
It includes companies from many technology industries involved in tech hardware, software and IT services, among several others. Like VGT, XLK tends to be top heavy. More than 47% of the fund is in Apple and Microsoft alone. The next largest holding, Broadcom Inc.
Currently, VGT has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.
Since the index hit its latest low in October 2022, seven stocks — Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla — have collectively risen nearly 117 percent, far outpacing the performance of the other 493 companies in the S&P 500. Together, these stocks have become known as the “Magnificent Seven.”
While the S&P 500 rose more than 24% in 2023, the Magnificent Seven big tech stocks— Apple , Amazon , Alphabet , Meta Platforms , Microsoft , Nvidia , and Tesla —did much of the heavy lifting . Nvidia and Meta were the index's top two performers, while Tesla rounded out the top 10.
By investing in such funds, investors can benefit from potential gains in other sectors that might compensate for any setbacks in some sectors. Interestingly, many flexi-cap and large-cap funds (which are diversified equity funds) allocate 9-10 percent of their portfolio to IT stocks.
Expense Ratio – Advantage to SPY
Expense ratios are important because they determine how much you will pay out of your returns to the fund for operating your portfolio. SPY has the advantage in expense ratio with 0.09% compared to an expense ratio of 0.20% for QQQ.
QQQ holdings are dominated by big technology-related companies such as Apple, Amazon, Google, and Meta (formerly Facebook). The QQQ ETF offers investors big rewards during bull markets, the potential for long-term growth, ready liquidity, and low fees.
VGT - Performance Comparison. In the year-to-date period, VOO achieves a 2.62% return, which is significantly lower than VGT's 4.01% return. Over the past 10 years, VOO has underperformed VGT with an annualized return of 12.65%, while VGT has yielded a comparatively higher 20.53% annualized return.
- Invesco NASDAQ Internet ETF (PNQI) ...
- iShares Expanded Tech-Software Sector ETF (IGV) ...
- First Trust NASDAQ-100 Technology Sector Index Fund (QTEC) ...
- iShares U.S. Technology ETF (IYW) ...
- VanEck Semiconductor ETF (SMH)
- Vanguard Large-Cap ETF VV.
- Avantis International Equity ETF AVDE.
- Pimco Active Bond ETF BOND.
What is the fastest growing ETF?
| Fund Name | Ticker | Expense Ratio |
|---|---|---|
| Vanguard Mega-Cap Growth | (NYSEMKT:MGK) | 0.07% |
| iShares Russell Mid-Cap Growth | (NYSEMKT:IWP) | 0.23% |
| Vanguard Small-Cap Growth | (NYSEMKT:VBK) | 0.07% |
| iShares MSCI EAFE Growth | (NYSEMKT:EFG) | 0.35% |
In fact, an ETF called the Global X NASDAQ 100 Covered Call ETF (NASDAQ:QYLD), launched in 2013, currently boasts an eye-catching yield of 12%. While the ETF holds appeal for income investors, there are also several things that investors should be aware of before jumping in right after seeing that eye-popping yield.
| Ticker | ETF | 5Y |
|---|---|---|
| VDY | Vanguard FTSE Canadian High Dividend Yield Index ETF | 8.71% |
| XDIV | iShares Core MSCI Canadian Quality Dividend Index ETF | 8.63% |
| DQI | CI WisdomTree International Quality Dividend Growth Variably Hedged Index ETF | 8.2% |
| XEI | iShares S&P/TSX Composite High Dividend Index ETF | 7.88% |
- Schwab U.S. Dividend Equity ETF (SCHD)
- Invesco High Yield Equity Dividend Achievers ETF (PEY)
- iShares Core High Dividend ETF (HDV)
- Vanguard Real Estate ETF (VNQ)
- SPDR S&P Dividend ETF (SDY)
- iShares Core Dividend Growth ETF (DGRO)
- WisdomTree U.S. Quality Dividend Growth Fund (DGRW)
- 9 Safest Index Funds and ETFs to buy in 2024. ...
- Vanguard S&P 500 ETF (VOO -0.06%) ...
- Vanguard High Dividend Yield ETF (VYM -0.07%) ...
- Vanguard Real Estate ETF (VNQ -0.28%) ...
- iShares Core S&P Total U.S. Stock Market ETF (ITOT -0.07%) ...
- Consumer Staples Select Sector SPDR Fund (XLP 0.48%)
