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Best Tech ETFs for Passive Investors

Explore the best tech ETFs for passive investors, including top performers like VGT, XLK, and SMH

Pradeep Sharma

Investing in technology ETFs provides exposure to high-growth sectors while simplifying portfolio management. For passive investors, tech ETFs offer a diversified way to benefit from technological advancements without the complexity of individual stock picking. Below is a detailed breakdown of some of the best technology ETFs, analyzing their performance, focus, and overall suitability for passive investors.

1. Vanguard Information Technology ETF (VGT)

Total Assets: $79.01 billion

YTD Return: 24.33%

Average Volume: 487,747

Price: $598.59

1-Day Change: 0.09%

VGT provides broad exposure to U.S. technology companies, including large-cap players like Apple and Microsoft. It is a favorite among long-term investors due to its low expense ratio and consistent returns.

2. Technology Select Sector SPDR Fund (XLK)

Total Assets: $71.49 billion

YTD Return: 20.33%

Average Volume: 5,279,687

Price: $230.41

1-Day Change: -0.03%

XLK focuses on the largest technology firms in the S&P 500. Its liquidity and stable dividend payouts make it an appealing option for investors looking to blend growth with a degree of income stability.

3. VanEck Semiconductor ETF (SMH)

Total Assets: $25.02 billion

YTD Return: 45.62%

Average Volume: 8,755,264

Price: $254.65

1-Day Change: -0.20%

SMH specializes in semiconductor companies, one of the fastest-growing segments in the tech sector. With strong exposure to leading firms like Nvidia and Taiwan Semiconductor, SMH offers significant upside but with higher volatility.

4. iShares U.S. Technology ETF (IYW)

Total Assets: $19.13 billion

YTD Return: 26.19%

Average Volume: 881,580

Price: $154.62

1-Day Change: 0.06%

IYW offers exposure to top U.S. technology companies and provides a well-rounded mix of large and mid-cap stocks. It appeals to investors seeking long-term capital appreciation with moderate risk.

5. iShares Semiconductor ETF (SOXX)

Total Assets: $15.34 billion

YTD Return: 22.17%

Average Volume: 4,279,779

Price: $233.50

1-Day Change: -0.70%

SOXX focuses exclusively on semiconductor companies and provides significant exposure to chipmakers. The ETF capitalizes on the growing demand for semiconductors across various industries.

6. Fidelity MSCI Information Technology Index ETF (FTEC)

Total Assets: $12.30 billion

YTD Return: 24.50%

Average Volume: 321,182

Price: $178.09

1-Day Change: 0.16%

FTEC offers a low-cost way to invest in the broader U.S. technology sector. It mirrors the performance of the MSCI USA IMI Information Technology Index, making it a great choice for cost-conscious investors.

7. First Trust NASDAQ Cybersecurity ETF (CIBR)

Total Assets: $6.85 billion

YTD Return: 15.58%

Average Volume: 584,876

Price: $62.12

1-Day Change: 1.21%

CIBR focuses on cybersecurity companies, a niche but rapidly growing sector. As data privacy concerns increase, this ETF stands out as a thematic investment with strong potential for future growth.

8. iShares Expanded Tech-Software Sector ETF (IGV)

Total Assets: $6.98 billion

YTD Return: 13.84%

Average Volume: 3,851,835

Price: $92.36

1-Day Change: 0.69%

IGV emphasizes software companies and provides exposure to industry giants like Adobe and Microsoft. This ETF benefits from the ongoing shift toward software-as-a-service (SaaS) models.

9. First Trust Cloud Computing ETF (SKYY)

Total Assets: $3.05 billion

YTD Return: 20.63%

Average Volume: 130,167

Price: $105.76

1-Day Change: 1.19%

SKYY tracks companies focused on cloud computing. This ETF offers investors access to firms driving digital transformation through cloud technologies.

10. Amplify Cybersecurity ETF (HACK)

Total Assets: $1.79 billion

YTD Return: 18.33%

Average Volume: 85,758

Price: $71.43

1-Day Change: 1.48%

HACK offers another option for those interested in cybersecurity investments. With exposure to companies addressing increasing cyber threats, this ETF provides a defensive play within the tech space.

The technology sector offers numerous ETFs, each catering to different themes and segments within the industry. VGT and XLK are ideal for broad exposure to the technology sector, while SMH and SOXX provide targeted investments in semiconductors. FTEC serves as a low-cost alternative, and CIBR and HACK offer thematic plays on cybersecurity.

For passive investors, choosing the right ETF depends on the desired level of exposure, risk tolerance, and investment horizon. Broad-market ETFs like VGT and XLK provide stability, while sector-specific ETFs like SMH or SKYY offer higher potential returns with more volatility.

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