ETFs are very much in favor among investors today because they provide a good shield against the volatility of the stock market. There are different kinds of ETFs available in the market today. While some funds hold stocks in diverse sectors like retail, pharma, finance, automobile and the like, some other funds focus only on specific sectors. With the current surge in the technology sector, tech ETFs can provide you great returns if you invest wisely. If you are looking for some technology-based exchange traded funds, you can try the following:
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One of the technology ETFs that have witnessed considerable growth in the past and is all poised for a bright future ahead is the First Trust DJ Internet Index ETF (FDN, Financial). The highlight of this fund is that it holds stocks in some of the best internet companies that have had some glorious years in the recent past. Some of the top stocks among the 42 companies that the fund holds are 8.2% of Amazon (AMZN, Financial), 7.9% of Facebook (FB, Financial), 5.4% of eBay Inc. (EBAY, Financial), 5.3% of Priceline Group (PCLN, Financial), 4.9% of Google (GOOG, Financial), 4.4% of Salesforce.com (CRM, Financial), 4.2% of Netflix (NFLX, Financial),4% of LinkedIn (LNKD, Financial) and 3.8% of Twitter (TWTR). In the last 12 months, the ETF grew by 4%. With all these companies growing at an alarmingly high rate, this fund has immense potential to grow to great extents in the future. With an expense ratio of just about 0.57%, this fund is very affordable, and it is a huge value of money considering the returns it gives out to shareholders. The share price trend of the fund for the last few months is as follows:
Making maximum use of cloud computing
The next technology ETF that is considered one of the best bets for investors looking for income is the First Trust ISE Cloud Computing Index ETF (SKYY, Financial). This fund invests in 39 companies exclusively from the cloud computing department of the technology sector. This is a growing department and this fund holds stocks in companies that are making some breakthrough progress in their respective cloud computing strategies. Of the 39 companies, some of the most noteworthy ones are 4.4% of Netflix, 4% of Brightcove Inc. (BCOV), 3.8% of Aruba Networks (ARUN), 3.9% of Amazon, 3.6% of salesforce.com, 3.5% of Akamai Technologies (AKAM), Red Hat Inc. (RHT), Informatica Corporation (INFA) and Rackspace Hosting Inc. (RAX) each and 3.4% of Juniper Networks (JNPR). With an expense ratio of 0.60% and a 7% growth during 2014, this fund guarantees full value for money. Stock movement of the fund for the last few months is seen below:
Social media stocks are the key
The next ETF that we are going to talk about, not only focuses on the technology sector, but also focuses on one particular type of stock – social media stocks. We are discussing about the Global X Social Media Index ETF (SOCL, Financial) here. As the name indicates, this fund holds some international stocks as well. Around 50% of the stocks are based in the US. The remaining companies are foreign stocks, with China leading the pack with about 28% of the companies of this fund. Due to rough weather in China and other economies, the performance of this fund came down by 16% during 2014; however, with the social media industry looking good for quite a few more years, this fund can be bought by investors who are looking for long term growth prospects. Currently, the expense ratio of this fund is just about 0.65% and it holds stocks in some of the top companies like 13.3% of LinkedIn, 11.5% of Tencent Holdings (TCEHY), 10.3% of Facebook, 6% of Groupon (GRPN), 5.5% of Sina Corporation (SINA) and 5% ofGoogle. The trend of price movement for the last few months of this fund is as follows:
Conclusion
Technology ETFs are those that hold stocks in some of the choicest of companies so that investors can get maximum returns. Though there are many tech-based ETFs in the market, the above ones are currently the best, because the companies whose stocks they hold promise great growth rates for the future.
