Top 3 Technology Equities ETFs to Invest in for Exponential Growth and Diversification

In the age of changing technologies and increased pervasiveness across all spheres, technology equities ETFs are a perfect investment option for those who want to invest in it for exponential growth and strong returns. These ETFs offer coverage of companies from a wide range of industries involved in the development of software, communication services, electronics, cybersecurity, and data management, thus diversification.

With such increasing innovation, it is in this climate that investors are expected to be holding strong Technology Equities ETFs such as Fidelity MSCI Information Technology Index ETF FTEC, Vanguard Information Technology Index Fund ETF Shares VGT, and iShares Expanded Tech-Software Sector ETF IGV.

The information technology market is expected to boom with a notable CAGR of 8.3% and is supposed to value at $12.42 trillion by the end of 2028. Trends prevailing in the forecast period are globalized IT services, digital transformation, climate tech solutions, innovation in cybersecurity, AI, innovative city development, and rapidly changing e-commerce.

A new Gartner release says by 2028, more than 75 percent of organizations will have a plan in place for the backup of SaaS applications. It is estimated that end-user spending by worldwide customers on SaaS will grow by 20 percent to $247.2 billion this year, and it would cross $300 billion by 2025.

What is more, technological innovation has lately advanced to unprecedented levels. In 2023 and 2024, the number of tokens that were processed through large language models grew from 100,000 to nearly two million. Consequently, investments and innovation have risen in order to further develop more powerful and efficient computing systems.

Amidst, investing in quality tech equities ETFs could offer exposure to a big potential segment which presents an opportunity for some investors to get good returns. These ETFs offer diversity through investment in companies operating within the technology sector. In addition, with increased prospects of the industry, these ETFs also have strong growth potential.

Considering that factors are supportive, let’s see the fundamentals of the three top Technology Equities ETFs starting with number 3.

ETF #1: Fidelity MSCI Information Technology Index ETF (FTEC)

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FTEC is an index of U.S. equities from the information technology sector only in a market-cap-weighted manner. FTEC gives investors exposure to U.S. technology companies in all size ranges as represented by an equity index known as the MSCI USA IMI Information Technology 25/50 Index by its price and yield.

The fund has an AUM of $11.23 billion. Among the top holdings are Apple Inc. (AAPL), at 16.44%, Microsoft Corporation (MSFT), at 14.32%, and NVIDIA Corporation (NVDA) and Broadcom Inc. (AVGO) 13.14% and 4.41%.

The ETF holds 297 holdings, and its top 10 assets constitute 58.03% of its AUM. FTEC has an expense ratio of 0.08%, with the category average being 0.58%. Its fund inflows for the last six months are $1.53 billion, and for the last year, are $2.08 billion.

FTEC yields a dividend payment of $1.12 annually, which at the current price level, the yield stands at 0.67%. Besides this, the fund’s three-year dividend growth rate is 12.7%. In addition, the fund has maintained a record of paying dividends for ten consecutive years.

FTEC surged 8.2% over the last six months and 28.6% over the last twelve months to close the last trading session at $166.96. The fund carries a beta of 1.16. Its NAV was reported at $166.94 as of September 11, 2024.

Good opportunities are indicated by the POWR Ratings of FTEC. The B, or Buy, in our own rating system is the grade for the fund overall. The POWR Ratings are based on 118 distinct factors, each weighed to an optimal extent.

In the category of Technology Equities ETFs, FTEC has a grade of B for Buy & Hold. It ranks #31 out of 119 in the category.

All FTEC POWR Ratings can be located here.

ETF #2: Vanguard Information Technology Index Fund ETF Shares (VGT)

VGT is a managed by The Vanguard Group, Inc. It is an ETF that tracks U.S. public equity markets using all information technology sectors. It includes growth and value stocks of all market capitalizations.

VGT tracks the MSCI US IMI 25/50 Information Technology Index. The fund has $72.13 billion in AUM. VGT’s top holdings are AAPL with a 17.22% weighting and MSFT at 15.84%. NVDA and AVGO also hold shares with weighting of 14.07% and 4.75%, respectively.

The fund owns 320 holdings in total with the top 10 assets constituting 61.07% of its AUM. It is one of the lowest expense ratio funds of 0.10%, compared to the category average of 0.58%. VGT has seen $3.69 billion in fund inflows over the past six months and $5.74 billion over the past year.

VGT yields an annual dividend of $3.70 per share, resulting in a current yield of 0.66%. In addition to this, the dividend has risen CAGR by 12.3% over the last three years. It boasts a heritage record of 18 consecutive dividend-paying years.

VGT has risen by 8.2% over the last six months and 28.1% over the last year to close the last trading session at $561.58. It sports a beta of 1.16. The NAV of the fund stood at $561.64 as of September 11, 2024.

VGT’s robust fundamentals are well represented through POWR Ratings. The overall rating for the fund stands at B, which translates to a Buy in our proprietary rating system.

Buy & Hold investment strategy grade-B
It is ranked #30 in Technology Equities ETFs group, from among the 119 ETFs within that group.

Must read – https://stocknewsguru.com/news/high-potential-tech-stocks/

ETF #1: iShares Expanded Tech-Software Sector ETF (IGV)

IGV is an ETF that tracks the investment results of an index consisting of North American equities in the software industry. It invests mainly in mid-cap companies, and offer access to lesser-known, potentially high-growth companies. IGV tracks the performance of the S&P North American Technology-Software Index.

The AUM of the fund is $6.28 billion. Its largest position includes Adobe Inc. at a 10.19% weighting, followed by Salesforce, Inc. at an 8.84% weighting, and Oracle Corporation and MSFT at 8.39% and 7.61%, respectively. IGV has the total holdings of 115 and the top ten assets account for 60.16% of its AUM.

On the other hand, it is chargeable at an expense ratio of 0.41%. This is lesser compared to that of the category average of 0.58%. Over the past three months, IGV has recorded a fund inflow of $306.95 million. Also, it has a beta of 1.06.
IGV has risen 6.1% over the past month and 18.2% over the past year as the last trading session closed at $86.67. As at September 11, 2024, the fund has an NAV of $86.73.

The overall POWR ratings for IGV gives it a good outlook. The ETF has an A rating altogether, which means that in our exclusive system, it translates to a Strong Buy rating.

IGV has an A grade both for Buy & Hold and Trade categories. This fund ranks #2 in its category among 119 ETFs included in it.

VGT shares were trading at $566.07 per share Thursday afternoon, up $4.49 (+0.80%). Year-to-date, VGT has gained 17.39 percent, whereas the benchmark S&P 500 index has risen by 18.30 percent over the same period.