Top-Ranked Technology ETFs Soaring to All-Time Highs
The technology sector is booming and at the heart of the current market rally. It has shown strong resilience in one of the worst economic environments that the United States has ever seen.
Most of the strength is being driven by the biggest names in the sector like Facebook FB, Apple AAPL, Amazon AMZN and Microsoft MSFT thanks to the shift in consumer habits to a purely digital world with work, entertainment and shopping from home. In fact, the combined market value of the four companies is now close to $5 trillion, with Apple claiming the top spot at nearly $1.5 trillion. Only Facebook out of the four has a market cap below $1 trillion (read: Take a Bite of the Red-Hot Apple Stock With These Tech ETFs).
These big tech stocks propelled the broader stock market, especially the tech-heavy Nasdaq Composite Index, which has crossed the 10,000 milestone for the first time in the last trading session. Additionally, hopes of strong sales and earnings growth attracted investors to this sector.
Further, technology has a solid Zacks Sector Rank, being in the top 32%, suggesting continued outperformance in the coming months. The long-term outlook for the sector remains strong given the rapid emergence of cutting-edge technology, including cloud computing, big data, Internet of Things, wearables, VR headsets, drones, virtual reality, artificial intelligence, machine learning and 5G technology (see: all the Technology ETFs here).
Given this, many tech ETFs hit all-time highs in the recent trading session. Below, we have highlighted some of them that could be excellent plays to ride out the bullish trend in the tech space as these carry a solid Zacks Rank #1 (Strong Buy) or #2 (Buy).
iShares U.S. Technology ETF IYW – High Price: $264.77
This ETF offers exposure to 158 U.S. electronics, computer software and hardware, and informational technology companies. It tracks the Dow Jones U.S. Technology Capped Index. The fund has AUM of $5.4 billion and charges 42 bps in fees and expenses. Volume is good as it exchanges nearly 186,000 shares a day. The fund has a Zacks ETF Rank #1 with a Medium risk outlook.
Vanguard Information Technology ETF VGT – High Price: $274.18
This fund manages about $31.4 billion in its asset base and provides exposure to 316 technology stocks. It currently tracks the MSCI US Investable Market Information Technology 25/50 Index. The ETF has 0.10% in expense ratio, while volume is solid at nearly 1.1 million shares. It has a Zacks ETF Rank #1 with a Medium risk outlook.
Invesco NASDAQ Internet ETF PNQI – High Price: $170.68
This fund offers exposure to the largest and most-liquid companies that are engaged in Internet-related businesses by tracking the Nasdaq Internet Index. Holding 90 stocks in its basket, it has AUM of $651.5 million and trades in lower volume of about 32,000 shares a day. It charges 62 bps in fees per year and carries a Zacks ETF Rank #2 with a High risk outlook (read: ETFs to Tap on Soaring E-Commerce Sales Amid Coronavirus).
iShares Expanded Tech-Software Sector ETF IGV – High Price: $273.43
This ETF provides exposure to the software segment of the broader U.S. technology space by tracking the S&P North American Expanded Technology Software Index. Holding a basket of 100 securities, the fund charges 46 bps in annual fees and has AUM of $4 billion. Volume is good as it exchanges nearly 867,000 shares a day. IGV has a Zacks ETF Rank #1 with a High risk outlook.
iShares Expanded Tech Sector ETF IGM – High Price: $277.20
This ETF tracks the S&P North American Expanded Technology Sector Index, giving investors exposure to 298 hardware, software, Internet marketing, interactive media, and related companies. The fund has AUM of $2.3 billion and charges 46 bps in annual fees. It trades in a moderate volume of nearly 74,000 shares in hand a day and has a Zacks ETF Rank #2 with a Medium risk outlook.
First Trust Dow Jones Internet Index Fund FDN – High Price: $168.72
This fund follows the Dow Jones Internet Composite Index, giving investors exposure to the broad Internet industry. It holds about 42 stocks in its basket. FDN is the most-popular and liquid ETF in the broad technology space with AUM of $8.9 billion and average daily volume of around 563,000 shares. It charges 52 bps in fees per year and has a Zacks ETF Rank #2 with a High risk outlook (read: U.S. Outperforms YTD: 6 Top-Ranked ETF Winners).
MSCI Information Technology Index ETF FTEC – High Price: $81.01
This fund is home to 327 technology stocks with AUM of $3.9 billion and follows the MSCI USA IMI Information Technology Index. The ETF has 0.08% in expense ratio, while volume is solid at 599,000 shares a day. It carries a Zacks ETF Rank #1 with a Medium risk outlook.
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