ETFs
3 Gorgeous Tech ETFs to Buy with $10,000 and Hold Forever
Growth investors shouldn’t leave these three tech ETFs aside.
Investing in the stock market can be difficult. After all, there are tens of thousands of investment options to choose from. So where is the best place to start?
In my opinion, exchange traded funds (ETFs) offer something for everyone. This is a great starting point for new investors. Meanwhile, a seasoned investor can often find an ETF that helps them supplement their portfolio or boost their returns.
So let’s take a look at three technology ETFs that I think are worth considering for growth-oriented investors.
Image source: Getty Images.
Selected Technology Sector SPDR Funds
The first is the Selected Technology Sector SPDR Funds (XLK -0.33%). This ETF is one of the largest technology sector ETFs in the world, with over $65 billion in net assets. Additionally, with a history dating back to the 1990s, it is one of the oldest technology ETFs on the market.
Major titles include Microsoft, Apple, Nvidia, BroadcomAnd Advance Microphone Devices. However, potential investors should note how heavy these holdings are; Microsoft and Apple alone represent 42% of the fund’s overall holdings.
| Microsoft | MSFT | 22.9% |
| Apple | AAPL | 19.3% |
| Broadcom | AVGO | 4.5% |
| Nvidia | NVDA | 4.5% |
| Advanced microsystems | AMD | 3.1% |
| Selling power | RCMP | 3.1% |
| Adobe | ADBE | 2.4% |
| Accenture | ACN | 2.3% |
| Cisco Systems | CSCO | 2.1% |
| Oracle | ORCL | 2.1% |
As for performance, the fund has generated an incredible compound annual growth rate (CAGR) of 20.3% over the past decade, easily surpassing the compound annual growth rate (CAGR) of 20.3% in the last decade. over the last decade. S&P500The CAGR is 12.5% over the same period.
In addition, the fund spending rate of 0.09%, that’s great. This is one of the lowest expense ratios available for a sector ETF, and means investors will only pay $9 per year for every $10,000 invested in the fund.
VanEck Semiconductor ETF
The next step is the VanEck Semiconductor ETF (SMH -0.87%). As its name suggests, this fund focuses on all facets of semiconductor industry, including chip designers, manufacturers and foundries.
With semiconductors appearing in more places than ever — your smartphone, your car, maybe even your refrigerator — now is the perfect time to own semiconductor stocks. As a result, the VanEck Semiconductor ETF has an incredible CAGR of 27.2% dating back to 2014.
The fund’s top holdings include Nvidia, Inteland Broadcom.
| Nvidia | NVDA | 20.6% |
| Taiwan semiconductor manufacturing company | TSM | 11.9% |
| Broadcom | AVGO | 7.7% |
| ASML Holding | ASML | 4.9% |
| Texas Instruments | TXN | 4.6% |
| QUALCOMM | QCOM | 4.6% |
| Intel | INTC | 4.5% |
| Search Lam | LRCX | 4.5% |
| Micron | UM | 4.4% |
| Applied materials | AMAT | 4.4% |
Additionally, the rapid growth of artificial intelligence (AI) applications – and the need for fast, powerful semiconductors that underpin them – means the future looks bright for chipmakers.
When it comes to costs, investors in the fund are assigned an expense ratio of 0.35%. While that’s not great, it’s also not the lowest fees for tech sector ETFs. In other words, you are paying for the quality of this ETF.
Invesco QQQ Trust
The last one is the Invesco QQQ Trust (QQQ 0.02%). However, strictly speaking, this fund is not a pure technology ETF; his holdings include stocks like Costco, PepsiCoAnd Marriott International.
However, over 50% of its holdings are technology companies, which means it qualifies as a technology sector ETF in my book. Additionally, this fund, also known as “QQQ,” is one of my favorite ETFs. Here’s why:
The reason it is not over-diversified is that the fund follows the Nasdaq100 hint. This index includes non-financial stocks listed on the Nasdaq, weighted by market capitalization, with some modifications. In other words, it is similar to the S&P 500 index but a bit smaller, with a higher concentration of technology stocks and no financial stocks.
The main titles include many of the Magnificent seven, among others:
| Microsoft | MSFT | 8.8% |
| Apple | AAPL | 7.6% |
| Nvidia | NVDA | 5.8% |
| Alphabet | GOOG/GOOGL | 5.4% |
| Amazon | AMZN | 5.3% |
| Metaplatforms | META | 5% |
| Broadcom | AVGO | 4.4% |
| You’re here | TSLA | 2.4% |
| Costco | COST | 2.3% |
| Advanced microsystems | AMD | 1.8% |
In terms of performance, the fund has generated a CAGR of 18.4% over the past ten years, which far exceeds the returns of the S&P 500, the Dow Jones Industrial Average and the Russell 2000.
Total return level QQQ data by Y Charts.
Finally, its expense ratio is reasonable: 0.20%, meaning investors pay $20 per year for every $10,000 invested.
In summary, each of these tech-focused ETFs offers something unique, but they’re all worth considering for investors looking for growth.
Randi Zuckerberg, former director of market development and spokesperson for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Jake Lerch holds positions in Adobe, Alphabet, Amazon, Invesco QQQ Trust, Nvidia and Tesla. The Motley Fool holds positions and recommends ASML, Accenture Plc, Adobe, Advanced Micro Devices, Alphabet, Amazon, Apple, Applied Materials, Cisco Systems, Costco Wholesale, Lam Research, Meta Platforms, Microsoft, Nvidia, Oracle, Qualcomm, Salesforce, Semiconductor manufacturing in Taiwan, Tesla and Texas Instruments. The Motley Fool recommends Broadcom, Intel, and Marriott International and recommends the following options: long January 2025 $290 calls on Accenture Plc, long January 2025 $45 calls on Intel, long January 2026 $395 calls on Microsoft, short January 2025 $310 calls on Accenture Plc, short January 2026 $405 calls on Microsoft, and short May 2024 $47 calls on Intel. The Mad Motley has a disclosure policy.