Hey Anon!
Tech stocks are one of the hottest portions of the market and have achieved high annualized returns in the past decade. Tech ETFs have also been performing exceptionally well, with some of them even outperforming the S&P 500 Index. Tech-focused localized ETFs are great ways for investors to diversify into the technology sector especially in the US and China (which has been the talk of the town recently), but high risks prevail as they are usually more volatile as compared their global counterparts or ETFs that contain stocks from multiple industries.
I know some of you lazy to read the whole thing right… So here are my final thoughts before we jump in to do a full-fledged comparison among the popular tech ETFs!
If you are looking for a global exposure, you could consider the O’Shares Global Internet Giants ETF (NYSE: OGIG) and ARK Next Generation Internet ETF (NYSE: ARKW). OGIG is relatively new but has performed well since inception. ARKW on the other hand is an actively managed ETF, which some may choose to avoid. Nevertheless, ARKW is the only ETF mentioned here that provides exposure to Tesla (you could also consider ARKK). Given Tesla’s growth in the recent years, ARKW has recently become famous in the community.
For US technology, if you are looking for exposure into FANG (Facebook, Amazon, Netflix, Google) stocks, you can consider Invesco QQQ Trust (NASDAQ: QQQ) and First Trust Dow Jones Internet Index Fund (NYSE: FDN). QQQ has been a hot topic in the community for some time. It has a relatively low expense ratio of only 0.20% as compared to the other tech ETFs and provides exposure to Apple, which completes the puzzle to the full FAANG stocks (More on FAANG stocks). Vanguard Information Technology ETF (NYSE: VGT) has the lowest expense ratio of 0.10% but is heavily weighted on Apple and Microsoft. First Trust Cloud Computing ETF (NASDAQ: SKYY) offers diversification into US subsector technology, with a heavy emphasis on the software sector.
For China technology, both the KraneShares CSI China Internet ETF (NYSE: KWEB) and Invesco China Technology ETF (NYSE: CQQQ) could be 2 of the best tech ETFs that you can consider. Both ETFs offer exposure to the 3 prominent Internet companies in China, namely Tencent, Meituan and Baidu. However, if you are looking for exposure into BAT (Baidu, Alibaba, Tencent) stocks, you should go for KWEB which consists of Alibaba as the highest weighting stock at 9.71% in the ETF.
So now to the drier part which gives you more information and insights into the tech ETFs… Here we gooooo!
Disclaimer: The information provided serves as an educational piece and is not intended to be personalised investment advice. Readers should always do their own due diligence and consider their financial goals before investing.
GLOBAL TECHNOLOGY
O’Shares Global Internet Giants ETF (NYSE: OGIG)
The O’Shares Global Internet Giants ETF seeks to track the performance of the O’Shares Global Internet Giants Index. It is a rules-based ETF designed to provide investors with the means to invest in some of the largest global companies that derive most of their revenue from the Internet and e-commerce sectors that exhibit quality and growth potential.
General Information
Constituents
As of 30 June 2020, the top 10 constituents of the O’Shares Global Internet Giants ETF are:
Sector Classification
Based on the GICS sector classification, information technology (43.58%) takes up most of the O’Shares Global Internet Giants ETF, followed by communication services (31.36%), and consumer discretionary (24.94%).
Performance
As of 30 June 2020, the O’Shares Global Internet Giants ETF had a one-year return of 51.16%.
References were made to the O’Shares Global Internet Giants ETF Fact Sheet. Click here to read more!
ARK Next Generation Internet ETF (NYSE: ARKW)
The ARK Next Generation Internet ETF is an actively managed ETF that seeks long-term growth of capital. It seeks to achieve this investment objective by investing under normal circumstances primarily (at least 80% of its assets) in domestic and foreign equity securities of companies that are relevant to its investment theme of next generation internet.
General Information
Constituents
As of 30 June 2020, the top 10 constituents of the ARK Next Generation Internet ETF are:
Sector Classification
Based on the GICS sector classification, information technology (44.2%) takes up most of the ARK Next Generation Internet ETF, followed by communication services (29.4%), and consumer discretionary (17.9%).
Performance
Over the past 5 years, the ARK Next Generation Internet ETF has produced an annualized return of 34.24%.
As of 30 June 2020, the ETF had a one-year return of 62.86%.
References were made to the ARK Next Generation Internet ETF Fact Sheet. Click here to read more!
US TECHNOLOGY
Vanguard Information Technology ETF (NYSE: VGT)
The Vanguard Information Technology ETF seeks to track the performance of the MSCI US Investable Market Information Technology 25/50 Index, which includes stocks of U.S. companies within the information technology sector. The sector is made up of companies in the following three general areas: technology software and services, technology hardware and equipment, and semiconductor and semiconductor equipment manufacturers.
General Information
Constituents
As of 30 June 2020, the top 10 constituents of the Vanguard Information Technology ETF are:
Sector Classification
Based on the GICS sector classification, systems software (21.9%) takes up most of the Vanguard Information Technology ETF, followed by technology hardware, storage and peripheral (20.7%), and semiconductors (15.1%).
Performance
Over the past 10 years, the Vanguard Information Technology ETF has produced an annualized return of 20.26%.
As of 30 June 2020, the ETF had a one-year return of 33.78%.
References were made to the Vanguard Information Technology ETF Fact Sheet. Click here to read more!
Invesco QQQ Trust (NASDAQ: QQQ)
The Invesco QQQ Trust seeks to track the Nasdaq-100 Index, which includes 100 of the largest domestic and international nonfinancial companies listed on the Nasdaq Stock Market based on market capitalization.
General Information
Constituents
As of 30 June 2020, the top 10 constituents of the Invesco QQQ Trust are:
Sector Classification
Based on the GICS sector classification, information technology (48.36%) takes up most of the Invesco QQQ Trust, followed by communication services (19.72%), and consumer discretionary (17.11%).
Performance
Over the past 10 years, the Invesco QQQ Trust has produced an annualized return of 20.43%.
As of 30 June 2020, the ETF had a one-year return of 33.52%.
References were made to the Invesco QQQ Trust Fact Sheet. Click here to read more!
US SUBSECTOR TECHNOLOGY
First Trust Dow Jones Internet Index Fund (NYSE: FDN)
The First Trust Dow Jones Internet Index Fund seeks to track the Dow Jones Internet Composite Index, which includes the largest and most actively traded stocks of U.S. companies in the Internet industry.
To be eligible for the Dow Jones Internet Composite Index, a stock must be listed on the NYSE, NYSE MKT or Nasdaq stock exchange and meet the following criteria:
Generate a majority of sales/revenues from the Internet
Minimum trading history of three months
Minimum three-month average float-adjusted market capitalization of $100 million
General Information
Constituents
As of 30 June 2020, the top 10 constituents of the First Trust Dow Jones Internet Index Fund are:
Sector Classification
Based on the GICS sector classification, information technology (46.93%) takes up most of the First Trust Dow Jones Internet Index Fund, followed by communication services (26.40%), and consumer discretionary (18.54%).
Performance
Over the past 10 years, the First Trust Dow Jones Internet Index Fund has produced an annualized return of 21.73%.
As of 30 June 2020, the ETF had a one-year return of 18.67%.
References were made to the First Trust Dow Jones Internet Index Fund Fact Sheet. Click here to read more!
First Trust Cloud Computing ETF (NASDAQ: SKYY)
The First Trust Cloud Computing ETF seeks to track the ISE CTA Cloud Computing Index. To be included in the index, a security must be classified as a Cloud Computing company by the Consumer Technology Association (CTA) and meet the following criteria:
Minimum market capitalization of $500 million
Minimum free float of 20%
Minimum three-month average daily dollar trading volume (ADDTV) of $5 million
General Information
Constituents
As of 30 June 2020, the top 10 constituents of the First Trust Cloud Computing ETF are:
Sector Classification
Based on the GICS sector classification, software (57.02%) takes up most of the First Trust Cloud Computing ETF, followed by IT services (15.63%), and internet and direct marketing retail (8.19%).
Performance
Over the past 5 years, the First Trust Cloud Computing ETF has produced an annualized return of 21.00%.
As of 30 June 2020, the ETF had a one-year return of 29.23%.
References were made to the First Trust Cloud Computing ETF Fact Sheet. Click here to read more!
CHINA TECHNOLOGY
Invesco China Technology ETF (NYSE: CQQQ)
The Invesco China Technology ETF seeks to track the FTSE China Incl A 25% Technology Capped Index, which includes constituents of the FTSE China Index and FTSE China A Stock Connect Index that are classified as information technology securities, including China A-shares and China B-shares.
General Information
Constituents
As of 30 June 2020, the top 10 constituents of the Invesco China Technology ETF are:
Sector Classification
Based on the GICS sector classification, communication services (47.83%) takes up most of the Invesco China Technology ETF, followed by information technology (41.46%), and consumer discretionary (8.64%).
Performance
Over the past 10 years, the Invesco China Technology ETF has produced an annualized return of 11.80%.
As of 30 June 2020, the ETF had a one-year return of 40.46%.
References were made to the Invesco China Technology ETF Fact Sheet. Click here to read more!
KraneShares CSI China Internet ETF (NYSE: KWEB)
The KraneShares CSI China Internet ETF seeks to track the CSI Overseas China Internet Index, a free float market capitalization weighted index consisting of China based companies whose primary business or businesses are focused on internet and internet-related technology.
General Information
Constituents
As of 30 June 2020, the top 10 constituents of the KraneShares CSI China Internet ETF are:
Sector Classification
Based on the GICS sector classification, consumer discretionary (45.80%) takes up most of the KraneShares CSI China Internet ETF, followed by communication services (40.63%), and healthcare (6.70%).
Performance
Over the past 5 years, the KraneShares CSI China Internet ETF has produced an annualized return of 9.94%.
As of 30 June 2020, the ETF had a one-year return of 41.57%.
References were made to the KraneShares CSI China Internet ETF Fact Sheet. Click here to read more!
FINAL THOUGHTS
If you are looking for a global exposure, you could consider the O’Shares Global Internet Giants ETF (NYSE: OGIG) and ARK Next Generation Internet ETF (NYSE: ARKW). OGIG is relatively new but has performed well since inception. ARKW on the other hand is an actively managed ETF, which some may choose to avoid. Nevertheless, ARKW is the only ETF mentioned here that provides exposure to Tesla (you could also consider ARKK). Given Tesla’s growth in the recent years, ARKW has recently become famous in the community.
For US technology, if you are looking for exposure into FANG (Facebook, Amazon, Netflix, Google) stocks, you can consider Invesco QQQ Trust (NASDAQ: QQQ) and First Trust Dow Jones Internet Index Fund (NYSE: FDN). QQQ has been a hot topic in the community for some time. It has a relatively low expense ratio of only 0.20% as compared to the other tech ETFs and provides exposure to Apple, which completes the puzzle to the full FAANG stocks. Vanguard Information Technology ETF (NYSE: VGT) has the lowest expense ratio of 0.10% but is heavily weighted on Apple and Microsoft. First Trust Cloud Computing ETF (NASDAQ: SKYY) offers diversification into US subsector technology, with a heavy emphasis on the software sector.
For China technology, both the KraneShares CSI China Internet ETF (NYSE: KWEB) and Invesco China Technology ETF (NYSE: CQQQ) could be 2 of the best tech ETFs that you can consider. Both ETFs offer exposure to the 3 prominent Internet companies in China, namely Tencent, Meituan and Baidu. However, if you are looking for exposure into BAT (Baidu, Alibaba, Tencent) stocks, you should go for KWEB which consists of Alibaba as the highest weighting stock at 9.71% in the ETF.
Happy investing!
Hey Anon!
Tech stocks are one of the hottest portions of the market and have achieved high annualized returns in the past decade. Tech ETFs have also been performing exceptionally well, with some of them even outperforming the S&P 500 Index. Tech-focused localized ETFs are great ways for investors to diversify into the technology sector especially in the US and China (which has been the talk of the town recently), but high risks prevail as they are usually more volatile as compared their global counterparts or ETFs that contain stocks from multiple industries.
I know some of you lazy to read the whole thing right… So here are my final thoughts before we jump in to do a full-fledged comparison among the popular tech ETFs!
If you are looking for a global exposure, you could consider the O’Shares Global Internet Giants ETF (NYSE: OGIG) and ARK Next Generation Internet ETF (NYSE: ARKW). OGIG is relatively new but has performed well since inception. ARKW on the other hand is an actively managed ETF, which some may choose to avoid. Nevertheless, ARKW is the only ETF mentioned here that provides exposure to Tesla (you could also consider ARKK). Given Tesla’s growth in the recent years, ARKW has recently become famous in the community.
For US technology, if you are looking for exposure into FANG (Facebook, Amazon, Netflix, Google) stocks, you can consider Invesco QQQ Trust (NASDAQ: QQQ) and First Trust Dow Jones Internet Index Fund (NYSE: FDN). QQQ has been a hot topic in the community for some time. It has a relatively low expense ratio of only 0.20% as compared to the other tech ETFs and provides exposure to Apple, which completes the puzzle to the full FAANG stocks (More on FAANG stocks). Vanguard Information Technology ETF (NYSE: VGT) has the lowest expense ratio of 0.10% but is heavily weighted on Apple and Microsoft. First Trust Cloud Computing ETF (NASDAQ: SKYY) offers diversification into US subsector technology, with a heavy emphasis on the software sector.
For China technology, both the KraneShares CSI China Internet ETF (NYSE: KWEB) and Invesco China Technology ETF (NYSE: CQQQ) could be 2 of the best tech ETFs that you can consider. Both ETFs offer exposure to the 3 prominent Internet companies in China, namely Tencent, Meituan and Baidu. However, if you are looking for exposure into BAT (Baidu, Alibaba, Tencent) stocks, you should go for KWEB which consists of Alibaba as the highest weighting stock at 9.71% in the ETF.
So now to the drier part which gives you more information and insights into the tech ETFs… Here we gooooo!
Disclaimer: The information provided serves as an educational piece and is not intended to be personalised investment advice. Readers should always do their own due diligence and consider their financial goals before investing.
GLOBAL TECHNOLOGY
O’Shares Global Internet Giants ETF (NYSE: OGIG)
The O’Shares Global Internet Giants ETF seeks to track the performance of the O’Shares Global Internet Giants Index. It is a rules-based ETF designed to provide investors with the means to invest in some of the largest global companies that derive most of their revenue from the Internet and e-commerce sectors that exhibit quality and growth potential.
General Information
Inception Date: 5 June 2018
Expense Ratio: 0.48%
Distribution Frequency: NIL
Constituents
As of 30 June 2020, the top 10 constituents of the O’Shares Global Internet Giants ETF are:
Sector Classification
Based on the GICS sector classification, information technology (43.58%) takes up most of the O’Shares Global Internet Giants ETF, followed by communication services (31.36%), and consumer discretionary (24.94%).
Performance
As of 30 June 2020, the O’Shares Global Internet Giants ETF had a one-year return of 51.16%.
References were made to the O’Shares Global Internet Giants ETF Fact Sheet. Click here to read more!
ARK Next Generation Internet ETF (NYSE: ARKW)
The ARK Next Generation Internet ETF is an actively managed ETF that seeks long-term growth of capital. It seeks to achieve this investment objective by investing under normal circumstances primarily (at least 80% of its assets) in domestic and foreign equity securities of companies that are relevant to its investment theme of next generation internet.
General Information
Inception Date: 30 September 2014
Expense Ratio: 0.76%
Distribution Frequency: Annually
Constituents
As of 30 June 2020, the top 10 constituents of the ARK Next Generation Internet ETF are:
Sector Classification
Based on the GICS sector classification, information technology (44.2%) takes up most of the ARK Next Generation Internet ETF, followed by communication services (29.4%), and consumer discretionary (17.9%).
Performance
Over the past 5 years, the ARK Next Generation Internet ETF has produced an annualized return of 34.24%.
As of 30 June 2020, the ETF had a one-year return of 62.86%.
References were made to the ARK Next Generation Internet ETF Fact Sheet. Click here to read more!
US TECHNOLOGY
Vanguard Information Technology ETF (NYSE: VGT)
The Vanguard Information Technology ETF seeks to track the performance of the MSCI US Investable Market Information Technology 25/50 Index, which includes stocks of U.S. companies within the information technology sector. The sector is made up of companies in the following three general areas: technology software and services, technology hardware and equipment, and semiconductor and semiconductor equipment manufacturers.
General Information
Inception Date: 26 January 2004
Expense Ratio: 0.10%
Distribution Frequency: Quarterly
Constituents
As of 30 June 2020, the top 10 constituents of the Vanguard Information Technology ETF are:
Sector Classification
Based on the GICS sector classification, systems software (21.9%) takes up most of the Vanguard Information Technology ETF, followed by technology hardware, storage and peripheral (20.7%), and semiconductors (15.1%).
Performance
Over the past 10 years, the Vanguard Information Technology ETF has produced an annualized return of 20.26%.
As of 30 June 2020, the ETF had a one-year return of 33.78%.
References were made to the Vanguard Information Technology ETF Fact Sheet. Click here to read more!
Invesco QQQ Trust (NASDAQ: QQQ)
The Invesco QQQ Trust seeks to track the Nasdaq-100 Index, which includes 100 of the largest domestic and international nonfinancial companies listed on the Nasdaq Stock Market based on market capitalization.
General Information
Inception Date: 10 March 1999
Expense Ratio: 0.20%
Distribution Frequency: Quarterly
Constituents
As of 30 June 2020, the top 10 constituents of the Invesco QQQ Trust are:
Sector Classification
Based on the GICS sector classification, information technology (48.36%) takes up most of the Invesco QQQ Trust, followed by communication services (19.72%), and consumer discretionary (17.11%).
Performance
Over the past 10 years, the Invesco QQQ Trust has produced an annualized return of 20.43%.
As of 30 June 2020, the ETF had a one-year return of 33.52%.
References were made to the Invesco QQQ Trust Fact Sheet. Click here to read more!
US SUBSECTOR TECHNOLOGY
First Trust Dow Jones Internet Index Fund (NYSE: FDN)
The First Trust Dow Jones Internet Index Fund seeks to track the Dow Jones Internet Composite Index, which includes the largest and most actively traded stocks of U.S. companies in the Internet industry.
To be eligible for the Dow Jones Internet Composite Index, a stock must be listed on the NYSE, NYSE MKT or Nasdaq stock exchange and meet the following criteria:
Generate a majority of sales/revenues from the Internet
Minimum trading history of three months
Minimum three-month average float-adjusted market capitalization of $100 million
General Information
Inception Date: 19 June 2006
Expense Ratio: 0.52%
Distribution Frequency: NIL
Constituents
As of 30 June 2020, the top 10 constituents of the First Trust Dow Jones Internet Index Fund are:
Sector Classification
Based on the GICS sector classification, information technology (46.93%) takes up most of the First Trust Dow Jones Internet Index Fund, followed by communication services (26.40%), and consumer discretionary (18.54%).
Performance
Over the past 10 years, the First Trust Dow Jones Internet Index Fund has produced an annualized return of 21.73%.
As of 30 June 2020, the ETF had a one-year return of 18.67%.
References were made to the First Trust Dow Jones Internet Index Fund Fact Sheet. Click here to read more!
First Trust Cloud Computing ETF (NASDAQ: SKYY)
The First Trust Cloud Computing ETF seeks to track the ISE CTA Cloud Computing Index. To be included in the index, a security must be classified as a Cloud Computing company by the Consumer Technology Association (CTA) and meet the following criteria:
Minimum market capitalization of $500 million
Minimum free float of 20%
Minimum three-month average daily dollar trading volume (ADDTV) of $5 million
General Information
Inception Date: 5 July 2011
Expense Ratio: 0.60%
Distribution Frequency: Quarterly
Constituents
As of 30 June 2020, the top 10 constituents of the First Trust Cloud Computing ETF are:
Sector Classification
Based on the GICS sector classification, software (57.02%) takes up most of the First Trust Cloud Computing ETF, followed by IT services (15.63%), and internet and direct marketing retail (8.19%).
Performance
Over the past 5 years, the First Trust Cloud Computing ETF has produced an annualized return of 21.00%.
As of 30 June 2020, the ETF had a one-year return of 29.23%.
References were made to the First Trust Cloud Computing ETF Fact Sheet. Click here to read more!
CHINA TECHNOLOGY
Invesco China Technology ETF (NYSE: CQQQ)
The Invesco China Technology ETF seeks to track the FTSE China Incl A 25% Technology Capped Index, which includes constituents of the FTSE China Index and FTSE China A Stock Connect Index that are classified as information technology securities, including China A-shares and China B-shares.
General Information
Inception Date: 8 December 2009
Expense Ratio: 0.70%
Distribution Frequency: Annually
Constituents
As of 30 June 2020, the top 10 constituents of the Invesco China Technology ETF are:
Sector Classification
Based on the GICS sector classification, communication services (47.83%) takes up most of the Invesco China Technology ETF, followed by information technology (41.46%), and consumer discretionary (8.64%).
Performance
Over the past 10 years, the Invesco China Technology ETF has produced an annualized return of 11.80%.
As of 30 June 2020, the ETF had a one-year return of 40.46%.
References were made to the Invesco China Technology ETF Fact Sheet. Click here to read more!
KraneShares CSI China Internet ETF (NYSE: KWEB)
The KraneShares CSI China Internet ETF seeks to track the CSI Overseas China Internet Index, a free float market capitalization weighted index consisting of China based companies whose primary business or businesses are focused on internet and internet-related technology.
General Information
Inception Date: 31 July 2013
Expense Ratio: 0.76%
Distribution Frequency: Annually
Constituents
As of 30 June 2020, the top 10 constituents of the KraneShares CSI China Internet ETF are:
Sector Classification
Based on the GICS sector classification, consumer discretionary (45.80%) takes up most of the KraneShares CSI China Internet ETF, followed by communication services (40.63%), and healthcare (6.70%).
Performance
Over the past 5 years, the KraneShares CSI China Internet ETF has produced an annualized return of 9.94%.
As of 30 June 2020, the ETF had a one-year return of 41.57%.
References were made to the KraneShares CSI China Internet ETF Fact Sheet. Click here to read more!
FINAL THOUGHTS
If you are looking for a global exposure, you could consider the O’Shares Global Internet Giants ETF (NYSE: OGIG) and ARK Next Generation Internet ETF (NYSE: ARKW). OGIG is relatively new but has performed well since inception. ARKW on the other hand is an actively managed ETF, which some may choose to avoid. Nevertheless, ARKW is the only ETF mentioned here that provides exposure to Tesla (you could also consider ARKK). Given Tesla’s growth in the recent years, ARKW has recently become famous in the community.
For US technology, if you are looking for exposure into FANG (Facebook, Amazon, Netflix, Google) stocks, you can consider Invesco QQQ Trust (NASDAQ: QQQ) and First Trust Dow Jones Internet Index Fund (NYSE: FDN). QQQ has been a hot topic in the community for some time. It has a relatively low expense ratio of only 0.20% as compared to the other tech ETFs and provides exposure to Apple, which completes the puzzle to the full FAANG stocks. Vanguard Information Technology ETF (NYSE: VGT) has the lowest expense ratio of 0.10% but is heavily weighted on Apple and Microsoft. First Trust Cloud Computing ETF (NASDAQ: SKYY) offers diversification into US subsector technology, with a heavy emphasis on the software sector.
For China technology, both the KraneShares CSI China Internet ETF (NYSE: KWEB) and Invesco China Technology ETF (NYSE: CQQQ) could be 2 of the best tech ETFs that you can consider. Both ETFs offer exposure to the 3 prominent Internet companies in China, namely Tencent, Meituan and Baidu. However, if you are looking for exposure into BAT (Baidu, Alibaba, Tencent) stocks, you should go for KWEB which consists of Alibaba as the highest weighting stock at 9.71% in the ETF.
Happy investing!