Top Tech ETFs For October

Much of the market’s rally since the crashes of March can be attributed to tech. Tech stocks have proven to be important to the COVID economy and have also been proven to be resilient. Despite hitting correction territory during the worst September in 18 years, tech stocks have recovered much of these losses as the Nasdaq NDAQ is up over 6% thus far in October. While there is lingering suspicion that the House of Representatives could try and break up Big Tech companies, these stocks have been largely unaffected. There certainly are very real concerns about overstretched tech valuations while there is still no stimulus package, a slowing job recovery, a 2nd wave of COVID, and a possibly contested election on the horizon. But are tech stocks immune to these headwinds? Tech has boomed during these treacherous times, with and without stimulus, and with and without COVID spikes. But how sustainable is this? For hungry investors looking for growth and returns, Q.ai’s deep learning algorithms have identified several interesting Tech ETFs based on fund flows over the last 90-days, 30-days, and 7-days. This includes only one Top Buy ETF, two Neutral ETFs, and three Top Shorts ETFs.

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Top Buy

iShares PHLX Semiconductor ETF (SOXX)

The first Top Buy on our list is an ETF focused on the semiconductor space- the iShares PHLX Semiconductor ETF SOXX . This ETF aims to follow and track the overall performance of US based companies involved in semiconductor production and equipment. The ETF is on the smaller side with $3,824,848,129.20 AUM. While it has seen positive fund flows over the last 90-days at $57,114,480.00, it has seen negative fund flows of $-152,165,510.00 over the last 30-days, and $-64,127,480.00 over the last week. The iShares PHLX Semiconductor ETF also has a net expense ratio of .48% which is certainly on the pricier side.

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Vanguard Information Technology ETF (VGT)

What a difference a month can make. This ETF was a Top Short last month, and is a Top Buy this month-The Vanguard Information Technology ETF VGT . This ETF is passively managed, and focuses specifically on companies that engage in information technology. Its 5 largest holdings are fairly standard- Apple AAPL , Microsoft MSFT , Visa V . Nvidi NVDA a, and Mastercard MA . The ETF has $38,591,561,892.18 AUM. It has seen consistently negative fund flows, with a 90-day fund flow of $-76,384,003.95, a 30-day fund flows of $-239,900,897.58, and a 1-week fund flow of $-214,875,722.40. It also has a very reasonable net expense ratio of .1% compared to other tech ETFs.

Attractive

iShares U.S. Technology ETF (IYW)

The iShares U.S. Technology ETF IYW is our first Attractive ETF of the month. This ETF aims to give investors exposure to an index of U.S. based tech stocks focused on electronics, computer software and hardware, and informational technology. Not surprisingly, its Top 5 holdings are Apple, Microsoft, Facebook, Nvidia, and Alphabet. The fund reports an AUM of $6,403,044,080.005. Its fund flows over the long-term and short-term have been consistently negative, with a 90-day fund flow of $-245,493,310.00, a 30-day fund flow of $-133,549,005.00, and 1-week fund flow of $-61,485,480.00. Its net expense ratio of 0.44% is also fairly expensive compared to other tech ETFs.

Invesco QQQ Trust (QQQ)

After being rated as a Top Short last month, the Invesco QQQ Trust QQQ  comes in as our second Attractive ETF for this month. This ETF is the gold standard of ETFs that track the NASDAQ. With $145,656,920,295.00 AUM, it is by far the largest tech ETF in terms of AUM. It has had relatively stable and positive fund flows over the long-term and short-term. Its 90-day fund flows are $11,578,223,041.50, its 30-day fund flows are $12,172,442,719.00, and its 1-week fund flows are $3,448,106,760.00. It also has a fairly cheap net expense ratio of .2% compared to other tech ETFs.

Neutral

VanEck Vectors Semiconductor ETF (SMH)

The first Neutral ETF according to our AI systems is the VanEck Vectors Semiconductor ETF SMH . Similar to the iShares PHLX Semiconductor ETF, this ETF aims to follow and track the overall performance of companies involved in semiconductor production and equipment. However, their holdings are not limited to exclusively US companies. Based on AUM, it is on the smaller side with $2,939,825,649.99 AUM. It has seen consistently positive fund flows of $56,287,597.00 over the last 90-days, $118,664,678.00 over the last 30-days, and $130,295,930.00 over the last week. Its net expense ratio of .35% is relatively middle of the pack compared to other tech ETFs.

Technology Select Sector SPDR Fund (XLK)

The second and final Neutral ETF is the Technology Select Sector SPDR Fund XLK . This ETF seeks to track the performance of the technology and telecom sector of the S&P 500. It has $35,844,016,044.54 AUM, which is very comparable to the Vanguard Information Technology ETF’s AUM. It has seen marginally negative fund flows over the last 90-days and 30-days, with fund flows of $-1,425,892,060.05 and $-1,257,847,814.00 respectively, and a 1-week fund positive fund flow of $311,883,696.55. Its net expense ratio of .13% is also cheaper compared to other tech ETFs.

Unrated

Fidelity MSCI Information Technology Index ETF (FTEC)

The first interesting unrated Top Tech ETF is the Fidelity MSCI Information Technology Index ETF. This ETF seeks to track the performance of the MSCI USA IMI Information Technology Index MSCI which roughly represents the performance of the information technology sector in the US equity market. It is on the smaller side with $4,873,291,649.68 AUM, and has seen consistently positive fund flows. The ETF has a 90-day fund flow of $72,103,004.10, a 30-day fund flow of $9,751,530.65, and a 1-week fund flow of $9,181,085.00. With a net expense ratio of 0.084%, this is by far the cheapest compared to competing tech ETFs.

First Trust NASDAQ Technology Dividend Index Fund (TDIV)

The second unrated ETF for this month is the First Trust NASDAQ Technology Dividend Index Fund TDIV . This ETF is different because it takes a different approach to following a tech index. Rather than focusing on a subsector in the tech space, or focusing on an index or region of the world, this ETF chooses its holdings via a strict criteria. Their holdings must trade on either the Nasdaq or NYSE, must have a minimum market cap of $500 million, have a minimum three-month average daily dollar trading volume of $1 million, have paid a regular or common dividend within the past 12 months, have not decreased their dividends within the past 12 months, and have a minimum yield of at least 0.5%. Their top 5 holdings, which make up nearly 30% of the ETF, include IBM IBM , Inte INTC l, Microsoft, Cisco, and Apple. It is on the smaller side based on its AUM of only $1,288,973,172.01. It has also seen negative fund flows of $-21,444,838.50 over the last 90-days, $-17,481,434.00 over the last 30-days, and $0.00 over the last week. Its net expense ratio of .5% is also fairly expensive.

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