Top Tech ETFs For September

Although markets somewhat recovered yesterday, this has been the worst September for markets in nearly 18 years. One of the hardest hit sectors this month has been tech. While tech has largely led the rally since the bottoms of March were hit, they have had a rough go this month. The Nasdaq is down around 8% this month, and there are serious concerns about overstretched tech valuations weighing on the performance of tech stocks. There are additional concerns about a second stimulus package passing, as well as concerns about Oracle+Walmart’s bid for TikTok, and business relations with China. While there are concerns, the opportunity remains to invest in innovative companies that are built for this changing world we live in. For hungry investors looking for growth and returns, this pullback could be a solid entry point. But buyer beware. Q.ai’s deep learning algorithms have identified a few Tech ETFs based on the 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 U.S. Technology ETF (IYW)

The only Top Buy we have for this month is the iShares U.S. Technology ETF. The ETF aims to give investors specific exposure and focus on U.S. tech stocks in 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 $5,911,853,276.25. Its fund flows over the long-term and short-term have not been great, with a 90-day fund flow of $-266,328,865.00, a 30-day fund flow of $-225,428,755.00, and 1-week fund flow of $-87,290,620.00. The net expense ratio of 0.44% is fairly expensive 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. This ETF aims to follow and track the overall performance of companies involved in semiconductor production and equipment. Its Top 5 holdings include several semiconductor mainstays- Taiwan Semiconductor, Nvidia, Intel, Advanced Micro Devices, and Qualcomm. It has $2,526,847,875.39 AUM, and has seen negative fund flows of $-197,321,339.50 over the last 90-days, and $-140,635,011.00 over the last 30-days. However, it has performed better over the last week, with inflows of $11,804,915.50 over the last week. Its net expense ratio .35% is relatively middle of the pack compared to other tech ETFs.

iShares PHLX Semiconductor ETF (SOXX)

The next Neutral ETF on our list is another semiconductor focused ETF- the iShares PHLX Semiconductor ETF. It seeks to track the same sector as the VanEck Vectors Semiconductor ETF, however, the difference is the iShares ETF focuses strictly on U.S. companies. It has similar AUM as VanEck Vectors with $3,533,587,618.40 AUM. However, their performances are almost inversely related. While iShares had positive fund flows of $102,993,610.00 over the last 90-days, and $66,426,630.00 over the last 30-days, their 1-week fund flows are negative at $-56,605,860.00. iShares also has a higher net expense ratio than VanEck vectors at .48%.

Top Shorts

Invesco QQQ Trust (QQQ)

The first on our list of three Top Shorts is the Invesco QQQ Trust. This ETF is pretty much the gold standard of ETFs looking to directly track the NASDAQ. With $130,137,754,500.00 AUM, it is by far the largest tech ETF in terms of AUM. It has had relatively stable fund flows over the long-term and short-term. Its 90-day fund flows are $4,518,840,192.00, its 30-day fund flows are $7,056,273,338.50, and its 1-week fund flows are $6,648,252,869.00. It also has a fairly cheap net expense ratio at .2% compared to other tech ETFs.

Vanguard Information Technology ETF (VGT)

The next ETF on our Top Shorts list is the Vanguard Information Technology ETF. This ETF is passively managed, and focuses specifically on companies that engage in information technology. Its 5 largest holdings are fairly standard – Apple, Microsoft, Visa. Nvidia, and Mastercard. The ETF has $35,869,889,503.04 AUM. It has stronger inflows than many comparable ETFs, as its 90-day fund flows are $319,730,361.49, its 30-day fund flows are $124,452,305.59, and its 1-week fund flows are $67,211,121.60. It also has a very reasonable net expense ratio at .1% compared to other tech ETFs.

Technology Select Sector SPDR Fund (XLK)

The final ETF on the list of Top Shorts is the Technology Select Sector SPDR Fund. This ETF seeks to track the performance of the technology and telecom sector of the S&P 500. It has $33,579,443,447.47 AUM, very comparable to the Vanguard Information Technology ETF. Its fund flows have been negative outflows across the board, with a 90-day fund flow of $-962,749,624.35, a 30-day fund flow of $-1,493,285,887.95, and a 1-week fund flow of $-1,216,788,099.85. Its net expense ratio of .13% is also cheaper compared to other tech ETFs.

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