While individual tech stocks can offer big rewards, it’s also worth diversifying by investing in tech-focused ETFs. These funds pool together several companies, reducing the risk associated with any single firm. Plus, for newcomers to the market, ETFs can be a comfortable starting point.
Here are some tech funds to consider this month:
Global X Artificial Intelligence & Technology ETF (AIQ)
With the buzz around artificial intelligence (thanks in part to innovations like ChatGPT), AIQ is hard to overlook. Top names in the fund include Alphabet, Amazon, Meta Platforms, and the longstanding IBM. However, while AIQ covers a broad spectrum of sectors, it does come with a slightly high expense ratio of 0.68%.
SPDR S&P Kensho Smart Mobility ETF (HAIL)
Electric vehicles are clearly on the rise, but picking a single winner is challenging. HAIL offers exposure to EV startups such as Nio and Rivian. It’s diversified and has a favorable expense ratio of 0.45%.
Self-driving vehicles are capturing imaginations and investments. IDRV offers a balanced spread, featuring companies like Rivian, Tesla, and Aptiv. What’s intriguing is its global diversity. However, its expense ratio of 0.47% is close to the category average.
First Trust Cloud Computing ETF (SKYY)
Cloud computing is huge, and SKYY provides exposure to this booming sector. Its main holdings include Pure Storage, Amazon, and IBM. It’s a U.S.-centric ETF with an expense ratio slightly higher than average, but its performance speaks for itself.
ETFMG Prime Cyber Security ETF (HACK)
In our digital age, cybersecurity is paramount. HACK covers this area well, with leading holdings in Booz Allen Hamilton, Leidos, and Cisco Systems. It’s primarily U.S.-focused and carries an expense ratio of 0.6%.
With the global chip market flourishing, SOXX is a smart choice for those wanting to tap into the semiconductor space. Its major players include Nvidia, Broadcom, and Advanced Micro Devices. With an all-tech focus and an attractive expense ratio of 0.35%, it stands out in the crowd.
Global X E-Commerce ETF (EBIZ)
E-commerce has witnessed explosive growth, and EBIZ offers a slice of this vast pie. Key holdings include MercadoLibre, Booking Holdings, and Wayfair. Its expense ratio is slightly below average, and it’s shown promising returns so far this year.
In summary, while the tech sector can be volatile, a diversified approach through ETFs offers a balanced way to capture its growth potential. Whether you’re passionate about AI, e-commerce, or self-driving cars, there’s an ETF out there for you. Always remember to do your research and find what fits best for your investment strategy.