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The 6 Best Tech ETFs To Buy Tech Stocks in 2023

Last Updated: April 4, 2023 5 Comments – 3 min. read

The technology sector has had a particularly stellar run in recent years, considerably outperforming the market. Here we'll review the best tech ETFs to buy tech stocks in 2023.

Disclosure:  Some of the links on this page are referral links. At no additional cost to you, if you choose to make a purchase or sign up for a service after clicking through those links, I may receive a small commission. This allows me to continue producing high-quality, ad-free content on this site and pays for the occasional cup of coffee. I have first-hand experience with every product or service I recommend, and I recommend them because I genuinely believe they are useful, not because of the commission I get if you decide to purchase through my links. Read more here.

In a hurry? Here's the list:

  1. VGT – Vanguard Information Technology ETF
  2. FTEC – Fidelity MSCI Information Technology Index ETF
  3. XLK – Technology Select Sector SPDR Fund
  4. QQQ – Invesco QQQ Trust
  5. FDN – First Trust Dow Jones Internet Index Fund
  6. ARKK – ARK Innovation ETF

Contents

  • Introduction – Why Tech Stocks?
  • The 5 Best Tech ETFs
    • VGT – Vanguard Information Technology ETF
    • FTEC – Fidelity MSCI Information Technology Index ETF
    • XLK – Technology Select Sector SPDR Fund
    • QQQ – Invesco QQQ Trust
    • FDN – First Trust Dow Jones Internet Index Fund
    • ARKK – ARK Innovation ETF
  • Where to Buy These Tech ETFs

Introduction – Why Tech Stocks?

The tech sector is comprised of companies related to software, electronics, internet, computers, and other technological products and services. Think Apple, Microsoft, Adobe, Amazon, etc. Tech stocks are growth stocks, reinvesting profits into R&D and future projects to drive growth through innovation and invention. They usually pay low or no dividends.

The tech sector has expanded over the years as more internet- and software-focused companies have emerged. It is now by far the largest sector in the stock market, comprising over 25% of the total market by weight. Every corner of the modern economy touches technology in some way. Tech has been a major contributor to the growth of the total stock market in recent years, and specifically Big Tech (Amazon, Apple, Google, Microsoft, etc.). Because of this concentration of weight, constituents of the tech sector were reshuffled in late 2018 with a redefining of the GICS, e.g. Amazon went to Consumer Discretionary, Facebook went to Communication, etc.

Tech stocks have vastly outpaced the market over the last decade:

tech vs stock market
Source: PortfolioVisualizer.com

Many speculate that tech will continue its meteoric rise. Only time will tell.

Let's look at the best tech ETFs.

The 5 Best Tech ETFs

Below are the 5 best tech ETFs to buy tech stocks:

VGT – Vanguard Information Technology ETF

The Vanguard Information Technology ETF (VGT) is one of the most popular tech ETFs on the market, with over $38 billion in assets. The fund seeks to track the MSCI US Investable Market Information Technology 25/50 Index, providing broad exposure to the tech sector in the United States. This ETF has over 320 holdings and an expense ratio of 0.10%.

FTEC – Fidelity MSCI Information Technology Index ETF

FTEC from Fidelity seeks to track the exact same index as VGT but does so with a slightly lower fee of 0.08%, making it the most affordable fund on this list. Day traders will likely still appreciate the greater liquidity of VGT.

XLK – Technology Select Sector SPDR Fund

The Technology Select Sector SPDR Fund (XLK) is another popular broad tech ETF. The fund was established in 1998 and seeks to track the Technology Select Sector Index. This ETF has 72 holdings. Whereas VGT above provides about 10% mid-cap growth exposure, XLK is exclusively large-caps. XLK has an expense ratio of 0.13%.

QQQ – Invesco QQQ Trust

The Invesco QQQ Trust is the most popular fund on this list, with over $130 billion in assets. This ETF tracks the NASDAQ-100 Index. While The NASDAQ-100 is not explicitly a tech index, QQQ may actually provide the broadest diversification to what was previously “tech” after the aforementioned sector restructuring. At the time of writing, the fund has sector exposures of 48% Technology, 20% Communication, and 17% Consumer Discretionary. This gets you access to all the Big Tech players in one single fund – Apple, Amazon, Microsoft, Facebook, Google, Netflix, and more. This ETF has an expense ratio of 0.20%.

FDN – First Trust Dow Jones Internet Index Fund

Prefer to specifically target internet companies like Amazon, Facebook, Paypal, Google, Netflix, and Twitter? The First Trust Dow Jones Internet Index Fund has become extremely popular in recent years due to the success of these companies; it has over $10 billion in assets. The fund was established in 2006, has 42 holdings, and seeks to track the Dow Jones Internet Composite Index. This narrower targeting comes at a price; this ETF has an expense ratio of 0.52%.

ARKK – ARK Innovation ETF

ARKK is an actively managed ETF from ARK Invest, led by Catherine Wood. The firm has an impressive track record in recent years for beating the market with their focus on technology stocks. ARKK focuses on “disruptive innovation,” defined by ARK as “the introduction of a technologically enabled new product or service that potentially changes the way the world works.” This includes things like genomics, automation, energy, internet, and fintech (financial tech). Notable holdings in its typical range of 35-55 companies include Tesla, Square, LendingTree, Zillow, Spotify, Facebook, and more. This ETF does provide a small amount of international exposure at about 6%, though most of its holdings are in the U.S. ARKK has over $8 billion in assets and an expense ratio of 0.75%.

Where to Buy These Tech ETFs

All these tech ETFs should be available at any major broker. My choice is M1 Finance for U.S. investors. The broker has zero trade commissions and zero account fees, and offers fractional shares, dynamic rebalancing, and a modern, user-friendly interface and mobile app. I wrote a comprehensive review of M1 Finance here.

Canadians can find the above ETFs on Questrade or Interactive Brokers. Investors outside North America can use eToro or possibly Interactive Brokers.


Disclosures:  None.

Interested in more Lazy Portfolios? See the full list here.

Disclaimer:  While I love diving into investing-related data and playing around with backtests, this is not financial advice, investing advice, or tax advice. The information on this website is for informational, educational, and entertainment purposes only. Investment products discussed (ETFs, mutual funds, etc.) are for illustrative purposes only. It is not a recommendation to buy, sell, or otherwise transact in any of the products mentioned. I always attempt to ensure the accuracy of information presented but that accuracy cannot be guaranteed. Do your own due diligence. All investing involves risk, including the risk of losing the money you invest. Past performance does not guarantee future results. Opinions are my own and do not represent those of other parties mentioned. Read my lengthier disclaimer here.

m1

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About John Williamson, APMA®

Analytical data nerd, investing enthusiast, fintech consultant, Boglehead, and Oxford comma advocate. I'm not a big fan of social media, but you can find me on LinkedIn and Reddit.

Reader Interactions

Comments

  1. Ryan Larsen says

    August 24, 2021 at 7:36 am

    For a tech tilt would you recommend an ETF like IGM? It shares 2/3 of the holdings of QQQ but not pigeon-holed to the Nasdaq exchange and not as top heavy in Apple/Microsoft like VGT and XLK. After 2018 a lot of tech ETFs lost holdings like Amazon, Google, and Facebook because of their sector reclassification. Since IGM is expanded to more sectors, it’s a bit more diversified. They also cap holdings to prevent them from overtaking the index. Also worth noting that backtesting any of these prior to 2018 will not provide the same makeup. Thanks!

    Reply
    • John Williamson says

      August 24, 2021 at 10:54 am

      I’m not familiar with IGM. Looks expensive for my tastes. The market already has a tech tilt; the S&P 500 is about 30% tech at this point.

      Reply
  2. Michael Arbeit says

    April 6, 2021 at 3:33 pm

    What % would you give to each ETF in this Pie? Thanks.

    Reply
    • John Williamson says

      April 6, 2021 at 7:21 pm

      No reason to use all of them.

      Reply
    • Estevan says

      May 15, 2021 at 12:05 am

      Use Ark and QQQm. There might be a very small amount of overlap but most Ark holdings are small to mid cap and QQQm is more mid to large. I would use this as a supplemental portfolio separate from your less aggressive less volatile retirement portfolio. Depending on age and risk appetite your primary retirement account could also be aggressive with a tilt to small value and emerging markets as well as some Riets exposure.. Reits have a long history of impressive returns and more importantly They help reduce volatility.

      Reply

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