13 Great Tech ETFs for Years of Stellar Gains
Tech stocks might have had the wind knocked out of them to finish last year, but the sector's standing as a long-term source of growth still looks clear.
The world is becoming ever more dependent on technology. If you have any doubts, ask yourself: How long have you spent on your smartphone today? Are you reading this article on it right now? Have you taken an Uber recently? Have a "smart" home-security system? Plan on listening to your smart speaker later? Those are just some of the most obvious advances in tech. Behind the scenes, data centers are increasingly powering American business, health records are going digital, retail is using big-data analysis to better deliver its wares ... you get the point.
The technology sector was brutalized in the fourth quarter of 2018. Almost everything was lower - the Standard & Poor's 500-stock index fell 14% - but tech companies more than carried their weight, dropping 17.7% to make them the third-worst-performing sector during that period. Likewise, though, tech stocks have been among the leaders of 2019's rebound, rallying more than 12%, which in turn has sent numerous tech exchange-traded funds (ETFs) skyward.
The problem with investing in individual tech stocks is the risk. The sector is rife with disruption, and even longtime winners can suddenly find themselves on the outs - ask Nokia (NOK) or BlackBerry (BB). But you can whittle down that risk by investing in large bundles of these stocks, via ETFs.
Here are 13 of the best tech ETFs to buy. These funds allow you to participate in the growth of the whole sector, or even smaller industry trends, while minimizing the risk of single-stock implosions.
Vanguard Information Technology ETF
Market value: $18.4 billion
Dividend yield: 1.2%
Expenses: 0.1%, or $10 annually on $10,000 invested
One of the easiest, cheapest ways to get access to the whole technology sector is the Vanguard Information Technology ETF (VGT, $190.00).
But the technology sector is much different than it was a year ago.
In 2018, changes were made to the that determines which stocks belong in which sectors and industries. This included the creation of the communications sector, which essentially "stole") and Google parent Alphabet () that were responsible for a significant chunk of the tech sector's performance.
