2 Specialized Technology ETFs to Put on Your Radar Right Now

There are some “standard” technology exchange-traded funds (ETFs) that many investors have in their portfolios. The Invesco QQQ Trust (NASDAQ: QQQ) is the standard Nasdaq-100 ETFs, for example, and there are several ETFs focused on information technology and technology, with billions and billions of dollars under management.

However, if you’re looking to invest in a certain type of tech stock, or don’t necessarily want to limit your exposure to just the innovative companies in the tech sector, here are two out-of-the-box ETFs you might want to check out a closer look. .

If you don’t want to pick winners in chipmaking

Semiconductor manufacturers, also known as chipmakers, are a hot area of ​​the market for investors, and with the rapid growth of Nvidia (NVDA -0.03%)this shouldn’t come as a big surprise. As artificial intelligence (AI) technology, cloud computing, consumer electronics and other applications rapidly evolve in the coming years, there should be no shortage of demand for innovative chip designs.

However, there is no telling who the winners and losers of the semiconductor boom will be. So one way to get semiconductor stock exposure without trying to figure out which specific companies will perform the best is through iShares Semiconductor ETF (SOXX 1.79%)which tracks an index of 35 semiconductor manufacturers and related companies.

Unsurprisingly, Nvidia is a top holding, but no single stock makes up more than 10% of the fund’s assets. Actually, Broadcom is position no. 1 (Nvidia is number two) and AMD, Applied materials, Qualcommand Monolithic power systems are also important holding companies.

If you believe in the concept that a rising tide lifts all ships, using this ETF to address semiconductor stocks might be the best move for you. It has an expense ratio of 0.35%, which is quite reasonable for a specialized ETF like this.

There are innovative companies outside of the technology sector

If you’re looking for tech exposure in your portfolio, one problem with traditional tech ETFs is that not all of the innovative companies you might want to invest in are officially part of the technology sector (officially called the IT sector). For example, Netflix (NASDAQ: NFLX) it is officially part of the communications sector, just like social media stocks.

So, the one iShares Expanded Tech Sector ETF (IGM 0.65%) could be a smart ETF to add to your portfolio. In short, it tracks an index of mostly stocks in the technology sector, but also include technology-related companies that are technically included in the communications and consumer discretionary sectors.

For example, in addition to Netflix, top holdings outside the tech sector include Meta platforms, Alphabet (Google), Electronic artsand Roblox. The point is that you could think about these stocks are in the tech sector, but you wouldn’t have exposure to them if your ETF was a pure information technology index fund.

Perhaps the biggest downside is the fund’s 0.41% expense ratio, which is relatively high compared to some tech sector alternatives. For example, the Vanguard ETF for the information technology sector (VGT 0.59%) it has a significantly lower cost structure of just 0.10% of assets annually, but you wouldn’t be exposed to any of the stocks mentioned in the last paragraph.

Should you invest?

Of course, there’s no perfect ETF for everyone — with the possible exception of a low-cost core ETF S&P 500 ETFs. That’s why there are hundreds of excellent low-cost ETFs to choose from.

These are two solid options for investors who want technology exposure without having to try to pick individual winners. If you want exposure to the chipmaker space or want a broader tech ETF, these could be right for you. Make sure you compare them to a few alternatives – when investing in ETFs, it’s always a smart idea to go shopping