The technology sector includes companies focused on the research, development, and sale of a broad range of hardware and software used by consumers and businesses. It includes giants such as Apple Inc. (AAPL), Microsoft Corp. (MSFT), and Amazon.com Inc. (AMZN), as well as many fast-growing younger companies. The sector has been a major driver of overall gains in the stock market. The acceleration of the migration to online commerce amid the COVID-19 pandemic has intensified the importance of technology companies.
- The tech sector outperformed the broader market over the past year.
- The ETFs with the best 1-year trailing total return are BLOK, GAMR, and ARKW.
- The top holdings of these ETFs are PayPal Holdings Inc., Wemade Co. Ltd., and Tesla Inc., respectively.
There are 68 distinct technology ETFs that trade in the U.S., excluding inverse and leveraged ETFs, as well as funds with less than $50 million in assets under management (AUM). The technology sector, as measured by the S&P 500 Information Technology Sector Index, has outperformed the broader market with a total return of 44.3% over the past 12 months compared to the S&P 500's total return of 41.0%, as of May 28, 2021. The best-performing technology ETF, based on performance over the past year, is the Amplify Transformational Data Sharing ETF (BLOK). We examine the top 3 best tech ETFs below. All numbers below are as of June 1, 2021.
- Performance over 1-Year: 145.1%
- Expense Ratio: 0.70%
- Annual Dividend Yield: 1.41%
- 3-Month Average Daily Volume: 979,826
- Assets Under Management: $1.0 billion
- Inception Date: Jan. 16, 2018
- Issuer: Amplify Investments
BLOK is an actively managed ETF that invests at least 80% of its assets in stocks of companies that are actively engaged in the development and utilization of blockchain technologies. Blockchain technology is a type of distributed ledger technology underpinning many cryptocurrencies. The vast majority of the fund's holdings are based in the U.S. and over half operate within the software and services sector of the economy. It follows a blended strategy, investing in a mix of both growth and value stocks across the market cap spectrum. The fund's top three holdings include PayPal Holdings Inc. (PYPL), a provider of online payments solutions; Voyager Digital Ltd. (VYGR:CNQ), a provider of cryptocurrency brokerage services; and class A shares of Square Inc. (SQ), a financial services and digital payments company.
- Performance over 1-Year: 93.8%
- Expense Ratio: 0.75%
- Annual Dividend Yield: 0.84%
- 3-Month Average Daily Volume: 16,235
- Assets Under Management: $114.2 million
- Inception Date: March 8, 2016
- Issuer: ETFMG
GAMR tracks the EEFund Video Game Tech Index, which provides a measure of the performance of companies involved in the electronic gaming industry. The ETF offers pure-play and diversified exposure to the video game industry, including game developers, console and chip manufacturers, and game retailers. It follows a blended strategy, investing in both value and growth stocks of various market capitalizations. The fund's top three holdings include Wemade Co. Ltd. (112040:KRX), a Korea-based mobile and online game developer; class A shares of Roblox Corp. (RBLX), a video game developer; and NetDragon Websoft Holdings Ltd. (777:HKG), a China-based video game developer.
- Performance over 1-Year: 89.9%
- Expense Ratio: 0.79%
- Annual Dividend Yield: 1.37%
- 3-Month Average Daily Volume: 1,659,949
- Assets Under Management: $5.5 billion
- Inception Date: Sept. 29, 2014
- Issuer: ARK
ARKW is an actively managed ETF that invests primarily in domestic and U.S. exchange-traded foreign securities of companies engaged in cloud computing, cyber security, e-commerce, big data and artificial intelligence (AI), mobile technologies, the Internet of Things (IoT), social platforms, blockchain and P2P. The fund is focused on large-cap equities with strong growth potential. Its top three holdings include Tesla Inc. (TSLA), an electric vehicle and clean energy company; class A shares of Shopify Inc. (SHOP), a Canada-based multinational e-commerce company; and Twitter Inc. (TWTR), a micro-blogging and social media platform.
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