One of the easiest ways for investors to get exposure to the market is through exchange-traded funds (ETFs). Some of the best returns over the longer-term are being generated by technology businesses due to their ability to rapidly grow with little additional cost.
So why not put those two ideas together and think about technology-focused ETFs?
BetaShares NASDAQ 100 ETF (ASX: NDQ)
Although this ETF is not necessarily 100% a tech ETF, a large proportion of its underlying holdings are in the technology sector. It gives exposure to 100 of the biggest businesses listed on the NASDAQ.
Looking at the top holdings, Microsoft is 11.5% of the ETF, Apple is 10.1%, Amazon is 9.8%, Alphabet is 8.6% and Facebook is 5%.
Around 44.5% of the portfolio is classified as information technology with Amazon counted as consumer discretionary and Alphabet & Netflix counted as communication services.
This is probably the best way to get concentrated exposure to the FAANG shares on the ASX and it comes with an annual management fee of 0.48%.
Betashares Global Cybersecurity ETF (ASX: HACK)
As the name might suggest, this ETF gives exposure to global cybersecurity businesses.
As more infrastructure and other integral elements of our economy goes digital and onto the cloud, the importance of protection and security grows. That’s one of the reasons why this ETF has performed so well, the businesses are in demand from customers and investors alike – since inception in August 2016 the ETF has delivered returns after fees of 20% per annum, although I wouldn’t expect it to be as good every year. Past performance is not an indicator of future performance, as the disclaimer goes.
Some of its top holdings are Okta, Splunk, Palo Alto Networks, Raytheon, Cisco Systems, Zscaler, Akamai Technologies, Fortinet and Symantec.
Both of these ETFs offer a high level of exposure to interesting themes. Out of the two I’d choose the NASDAQ ETF because it provides more diversification to different businesses and different streams of earnings, but both could play a part of a diversified portfolio.
These top ASX shares could also be good ideas to invest in for dividends and growth.
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia owns shares of BETA CYBER ETF UNITS. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.