Technology ETFs

Technology is everywhere. It's in your pocket, on your wrist, at work, and in your home. Over the past few years, technology related stocks have garnered significant attention due to their innovation and outperformance. Big tech giants, such as Microsoft, Amazon and Google, have grown to dominate even broad-based indexes, and investing in technology now seems almost unavoidable for modern investors.

But with tech being such multifaceted sector, one might wonder – what is the best way to integrate them into your portfolio? Technology exchange traded funds (ETFs), in their various forms, offer an accessible approach to adding exposure to tech, big or small, to your portfolio.

Instead of picking individual stocks, a technology ETF does the hard work for you by offering a wide range of tech stocks in a single investment. Technology ETFs allow you to invest in a basket of tech-related companies. There are many different types of tech ETFs, meaning there is likely a solution designed to suit your risk appetite and investment goals. For instance, there are broad technology-focused ETFs which capture stocks in a wide range of sub-industries or you could consider a more targeted tech ETF which aims to track the performance of a very specific part of the technology market, such as cybersecurity.

The technology sector and all its different facets will continue to grow as the world becomes more digitalised and more advanced technologies are rolled out across the world. Learning how to harness this growth with tech ETFs is a compelling way to capture this opportunity.

Global X has a diverse lineup of technology ETFs. It has grown to represent a varied selection of compelling investment strategies, allowing investors to access technologies from the booming electric vehicle market to artificial intelligence.

• Global X Battery Tech & Lithium ETF (ACDC)
• Global X Cybersecurity ETF (BUGG)
• Global X Fintech & Blockchain ETF (FTEC)
• Global X Artificial Intelligence ETF (GXAI)
• Global X ROBO Global Robotics & Automation ETF (ROBO)
• Global X Semiconductor ETF (SEMI)
• Global X Morningstar Global Technology ETF (TECH)
• Global X FANG+ ETF (FANG)
• Global X FANG+ (Currency Hedged) ETF (FHNG)
• Global X S&P Biotech ETF (CURE)

Technology stocks, and by extension ETFs, have outperformed many other sectors in recent years. Below are three of Global X’s key technology-focused ETFs.

Global X Artificial Intelligence ETF (GXAI)

Artificial intelligence (AI) spans multiple segments, and its most innovative companies include both household names and newcomers from around the world. GXAI invests accordingly and is unconstrained with respect to sector and geography. This includes companies that potentially stand to benefit from the development and use of AI technology in their products and services, as well as in companies that provide hardware facilitating the use of AI for the analysis of big data.

GXAI Performance Performance table – showing YTD, 1 Mo, 3 Mo – auto-generated figures (no content needed here)

Why Invest in GXAI AI’s broad use cases means that it will be adopted across many industries around the globe over time. 56% of companies currently using AI, but many of these applications are limited and have a long runway to improve and be used more regularly in everyday life. This presents a major opportunity, as AI could contribute up to US$16 trillion to global GDP by 2030, with almost 14% of global GDP growth, surpassing the combined growth of China and India today. GXAI aims to capture this growth by investing in a range of AI-related companies.

Global X FANG+ ETF (FANG)

FANG Next-gen technology spans multiple segments, and its most innovative companies include both household names and newcomers from around the world. FANG invests accordingly without regard for sector, holding ten of the largest, most innovative companies listed in the US. This includes key innovative stocks such as Alphabet, Amazon, Apple, Meta, Microsoft and Netflix.

FANG Performance Performance table – showing YTD, 1 Mo, 3 Mo – auto-generated figures (no content needed here)

Why Invest in FANG FANG offers access to multiple disruptive trends driven by technology, changing demographics, and shifting consumer preferences in a single trade. It is designed to be a core growth-oriented investment with broad thematic exposure at a lower-cost compared to many actively managed funds, while also minimizing the costs and complexities of individually buying each stock from a US stock exchange.

Global X Cybersecurity ETF (BUGG)

Every day, we hear about data breaches, ransomware attacks, and hackers trying to break into systems, and as more of our lives move online, the need to protect digital data is becoming increasingly important. That's where the Cybersecurity ETF comes in. BUGG invests in companies that are on the front lines of cybersecurity, protecting everything from corporate networks to individual privacy. And, as cyber threats become more sophisticated, businesses and governments are pouring resources into cybersecurity, making this a rapidly growing field.

BUGG Performance Performance table – showing YTD, 1 Mo, 3 Mo – auto-generated figures (no content needed here)

Why Invest in BUGG We live in a time where our personal and business information is more valuable than ever, but it is also more vulnerable. By investing in BUGG, you will gain exposure to a sector that is not only booming now but has excellent growth potential as our digital world grows.

The simplest way to think of technology ETFs is as a basket of stocks. You invest in the ETF (the basket), and in turn, it invests in a wide range of companies within the technology sector (the stocks).
The beauty of this is that by spreading your investment across multiple companies, you gain exposure to the whole industry rather than having to pick individual stocks. This makes technology ETFs a great way of diversifying your portfolio, and as ETFs trade on stock exchanges just like individual shares, you can buy and sell them whenever the market is open.
In short, technology ETFs are a convenient and cost-effective way to invest in the tech sector without needing to bet on a single company's success.

Are you ready to start investing in technology ETFs? With Global X, the process is simple. First, you will need access to a brokerage account, and once you are set up, you can easily search for the specific ETF ticker you are interested in. Make sure you read the relevant PDS and TMD and then place your order.

Get more information on how to invest with Global X.

Technology ETFs have some excellent benefits, including:

Diversified Exposure

With a technology ETF, you are removing single stock risk. Instead, you are spreading your investment across many companies within a particular technology sector. So, if one company underperforms, the strong performance of others can balance things out.

Accessibility

Australia’s share market has significantly less listed technology companies compared to other developed markets, namely the US. As such, technology ETFs help to remove the costs and complexities involved in purchasing individual international stocks.

Growth Potential

Technology is one of the fastest-growing sectors, and tech companies are often leaders in innovation. When you invest in tech ETFs, you are gaining access to that growth potential without having to pick winners and losers among individual stocks.

As exciting as the world of tech can be, investing involves risk, and there are some important considerations to keep in mind. These include:

Volatility

The technology sector is known for being quite volatile, and tech stocks often experience large swings in price because innovation is fast paced. To put into simpler terms – what's hot today might not be tomorrow. So, if you are investing in a technology ETF, you will need to be prepared for these ups and downs.

Sector-Specific Risks

Another thing to keep in mind is that while a technology ETF offers diversification within the tech sector, it is still focused on one industry. This means you are somewhat exposed to sector-specific risks, and if the tech industry as a whole faces challenges, your ETF will likely feel the effects.

Disruption

Part of the appeal of the tech sector is that it is a disruptive field, but this also means that companies can be quickly outpaced by new competitors. As a result, it's important that you feel confident in staying informed about the sectors you are investing in and their evolving needs.