Investors’ thoughts on the subject of technology-sector exchange-traded funds (ETFs) tend to gravitate toward the biggest players. The Technology Select Sector SPDR Fund (NYSEARCA:XLK), of course, is the most popular proxy for tech stocks based on its $17 billion market cap, followed not far behind by the Vanguard Information Technology ETF (NYSEARCA:VGT). And while the PowerShares QQQ Trust (NASDAQ:QQQ) doesn’t quite meet the criteria to be included among tech ETFs, given its 60% weight to the sector, it’s often lumped into their ilk.
But technology is an increasingly wider space with a swelling number of upstart industries, which means the broad-based coverage provided by most tech ETFs isn’t necessarily enough — at least if you want to lock in the sector’s most explosive growth.
That’s covered by so-called “thematic” ETFs, which invest in the stocks best suited to profit from various investing mega-trends. Unsurprisingly, a large number of thematic ETFs are dedicated to the tech arena.
Thematic tech ETFs can help you get more acute exposure to things such as fintech, artificial intelligence and e-commerce, among other emerging technology trends. These funds aren’t meant to be “forever” holdings, nor should they take up too much space in your trunk. But they are strategic growth plays that, over the next few years, should help you generate market-beating returns.
Here are three such ETFs that I like right now.