Skyrocketing valuations of tech stocks have made it almost impossible for an average investor to increase their exposure to the technology industry. However, the best way to bypass the problem of expensive stocks is to buy technology ETFs. Exchange-traded fund is a security that tracks several assets. ETF lets you increase diversity and avoid risks. Here are the best cheap technology ETFs you should buy right now.
Technology Select Sector SPDR
Technology Select Sector SPDR Fund (NYSE:XLK) is one of the best technology ETFs to buy in 2017 and 2018. The fund has a diversified portfolio, with stocks from almost all growth sectors. Some of the notable picks of Technology Select Sector SDPR ETF are Apple, Cisco, Intel, AT&T and Visa. This tech ETF uses replication strategy, meaning it invests in securities represented in the index based on the index proportions to equally divide its investments and mitigate risks.
SPDR S&P Semiconductor
Semiconductor industry is poised to grow amid a huge demand of NAND and DRAM chips following a growth in the manufacturing of IoT devices, AI, data center and gaming hardware. SPDR S&P Semiconductor (ETF) (NYSE:XSD) is a cheap tech ETF that specifically focuses on semiconductor stocks. The ETF holds Micron, Intel, Silicon Laboratories, ON Semiconductor, Texas Instruments, NVidia, AMD and several other famous and small-cap semiconductor stocks.
Fidelity MSCI Information Technology
US News ranks Fidelity MSCI Information Technology Index ETF (NYSE:FTEC) as one of the top technology ETFs. The fund has returned more than 29% since the start of this year. The fund has about 86% of its investments in tech stocks. Notable stock holdings of MSCI tech ETF include Alphabet, Cisco, MarterCard, Visa, Facebook and Oracle.
The First Trust Cloud Computing
Cloud computing is one of the hottest segments in the technology industry. According to a report by Gartner, the net worth of public Cloud market is expected to soar to over $246 billion by the end of 2017. But Cloud computing stocks like Amazon and Alibaba are very expensive. If you want to invest in Cloud computing, the best way is to buy The First Trust Cloud Computing ETF (NASDAQ:SKYY). This Cloud computing ETF has returned more than 24% since the start of this year.
Vanguard Information Technology ETF
Vanguard Information Technology ETF (NYSE:VGT) has over 20% of its money invested in internet and software companies, while other investments are made in lucrative technology sectors like semiconductors, AI and IoT. The ETF is up over 29% year-to-date.
First Trust DJ Internet Index Fund
First Trust DJ Internet Index Fund (ETF)(NYSE:FDN) is one of the best performing technology ETFs you can buy on a budget. Almost every famous internet and tech stocks is present in this ETF’s portfolio, including Google, Amazon, Facebook, Snap and Twitter. The ETF has exposure to over 40 big technology companies.