With the US economy not performing too well thanks to the upcoming Presidential election, the British economy stuttering over the threat of a potential Brexit and China continually displaying poor figures, global markets have seen a poor start to 2016. So why not invest elsewhere, such as EFT trading? Technology continues to perform well, with Amazon and Netflix in particular showing growth. With this in mind, here are the top 3 technology ETFs to look at if you’d like to diversify your portfolio.
3:- Technology SPDR Fund (XLK)
If you’re looking to diversify your portfolio and invest in a liquid asset, then look no further than the Technology SPDR Fund (XLK). XLK diversifies across several sub-sectors in spite of being a technology sector fund. These means it also works with hardware, networking, the internet and semiconductors, as well as other sub-sectors.
The portfolio has holdings in Apple, Microsoft, Facebook and AT&T, so it’s diverse enough to withstand any storms that might be coming. It’s a consistently good performer, but is best as a long-term option to hold for the next 10 to 15 years. You’re unlikely to get rich quick from these shares, but they should hold their value well.
2:- First Trust Dow Jones Internet Index Fund (FDN)
The FDN is 5* rated and looks a great option if you think that internet companies are going to dominate the second half of the decade like they did in the first. It’s the largest ETF on the market, consisting of mostly large-cap US stocks.
Its top holdings include Netflix, Facebook and Amazon and it performed incredibly well in 2015. With good yearly and 5 yearly returns, FDN appears to be going from strength to strength.
1:- PowerShares QQQ ETF (QQQ)
If you’re looking for tech stocks that are also balanced with large-cap growth stocks, then PowerShares is for you. It’s not solely technology based, largely because it has diversified its holdings, particularly in the communications and healthcare sectors, so it’s evolved from purely being tech centred. However, this could help you if some tech stocks start to perform badly. As you’d potentially expect, it has holdings in Apple, Microsoft and Amazon.
It’s also had positive gains recently, with the 5 year annual return of 17% beating 95% of large-growth category peers.
To conclude, at a time of financial problems across the world, trading ETFs, particularly tech ETFs, could be the way forward. Of course, they’re not immune from problems and risk, so do your research carefully before investing.