2 Special Technology ETFs to Put on Your Radar Now | The Motley Fool

There are “regular” exchange-traded funds (ETFs) that many traders have in their portfolios. The Invesco Trust QQQ (NASDAQ: QQQ) it’s a standard Nasdaq-100 For example, ETFs, and there are many information technology and technology-focused ETFs with billions and billions of dollars under management.

However, if you want to invest in a certain type of technology asset or don’t want to limit your exposure to new technology companies, here are two out-of-the-box ETFs that you can like to take a closer look. .

If you don’t want to pick winners in chipmaking

Semiconductor manufacturers, also known as chipmakers, are a hot market for investors, and with the rapid increase in Nvidia (NVDA Image -0.03%)this should not be surprising. As artificial intelligence (AI), cloud computing, consumer electronics, and other applications evolve rapidly in the coming years, there should be no shortage of demand for new chip designs.

However, there is no telling who the winners and losers of the semiconductor boom will be. So, one way to find semiconductor stock performance without trying to figure out which companies will perform the best is by iShares Semiconductor ETF (SOXX 1.79%)which follows an index of 35 semiconductor manufacturers and related companies.

Unsurprisingly, Nvidia is the top holding, but no stock makes up more than 10% of the fund’s holdings. Actually, Broadcom is the position of No. 1 (Nvidia is number two), and AMD, Used Materials, Qualcommand Monolithic Power Systems are also major holdings.

If you are a believer in the idea that a rising tide lifts all boats, using this ETF to take a basket approach to semiconductor stocks may be the best move for you. It has an expense ratio of 0.35%, which is reasonable for a specialty ETF like this.

There are new companies out of the technology sector

If you’re looking for tech exposure in your career, one problem with traditional tech ETFs is that not all of the new companies you might want to invest in are legitimately part of the tech sector ( which is officially called the information technology department). For example, Netflix (NASDAQ: NFLX) It is a legal part of the communications industry, just like stock media.

So, the iShares Expanded Tech Sector ETF (IGM 0.65%) would be a smart ETF to add to your portfolio. In short, it follows the index of a lot Technology sector stocks but also include technology-related companies that are technically integrated into the telecommunications and consumer discretionary sectors.

For example, in addition to Netflix, top non-tech companies include Meta Platforms, Alphabet (Google), Electronic Artsand Roblox. The point is that you can consider these stocks they’re in the technology sector, but you wouldn’t have the opportunity to see them if your ETF was a pure technology index fund.

Perhaps the biggest drawback is the fund’s expense ratio of 0.41%, which is relatively high compared to other tech sector strategies. For example, the Vanguard Information Technology Sector ETF (VGT 0.59%) it has a very low cost of only 0.10% of assets per year, but you will not get exposure to the stocks mentioned in the last paragraph.

Should you invest?

Of course, there’s no perfect ETF for everyone — except for a basic, low-cost one. S&P 500 ETF. That’s why there are hundreds of low-cost ETFs to choose from.

These are two solid options for investors who want exposure to technology without the need to try to pick individual winners. If you would like exposure to the chipmaker space or are looking for a broad technology ETF, these may be a good fit for you. Be sure to compare them to several options — when investing in ETFs, it’s a smart idea to shop around.