5 Best Technology ETFs by 2023 Performance

5 Best Technology ETFs by 2023 Performance

AI exchange-traded funds are having a stellar year, delivering returns of as much as 86%.

sumit
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Senior ETF Analyst
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Reviewed by: Ron Day
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Edited by: Kent Thune

Technology is far and away the best performing stock market sector this year.

The $55 billion Technology Select Sector SPDR Fund (XLK), which holds the tech stocks within the S&P 500, has delivered a return of 49.4% year-to-date through Nov. 22.  

While XLK is one of the best performing technology ETFs of 2023, there are a handful of other tech-focused funds that have done even better than XLK. In most cases, these top performers hold narrower baskets of tech stocks. 

Additionally, the typical top-performing tech ETFs hold stocks that have been placed in other, non-technology sectors by classification schemes like GICS, but that are widely considered to be tech stocks by investors (like Googe parent Alphabet Inc. and Meta Platforms Inc.).  

Best Technology ETFs: YTD Performance 2023

Here are the best technology ETFs, as measured by year-to-date performance through Nov 22: 

MicroSectors FANG+ ETNs (FNGS)

The $162 million MicroSectors FANG+ ETN (FNGS) is one of those ETFs that holds a narrower basket of tech stocks. Up 86% this year, FNGS is the best performing tech ETF outside of funds that use leverage. 

FNGS tracks an equal-weighted basket of “highly traded growth stocks of next generation technology and tech-enabled companies.” 
 
That includes five FAANG stocks—Meta Platforms, Apple Inc., Amazon.com Inc., Netflix Inc. and Alphabet—plus a handful of other stocks like Advanced Micro Devices Inc., Nvidia Corp., Snowflake Inc. and Tesla Inc.  

FNGS’s highly concentrated portfolio has a lot of overlap with the “Magnificent Seven,” which has usurped “FANG” as the most popular grouping of dominant tech stocks. 

FNGS holds six of the seven Magnificent Seven, with the exclusion of Microsoft Corp.  

VanEck Semiconductor ETF (SMH)

The $11 billion VanEck Semiconductor ETF (SMH) also holds a smaller subset of tech stocks, specifically stocks of chip companies. 

The ETF tracks the MVIS US Listed Semiconductor 25 Index, “which is intended to track the overall performance of companies involved in semiconductor production and equipment.” 
 
Its 20% weighting in the red-hot stock of Nvidia has served it well this year and helped it to outperform rival iShares Semiconductor ETF (SOXX)—which has only an 8% weighting in the stock—by more than 1,000 basis points (60% versus 49%). 

SMH’s other top holdings include Taiwan Semiconductor Manufacturing Co., Broadcom Inc. and ASML Holding.

SPDR NYSE Technology ETF (XNTK) 

The $590 million SPDR NYSE Technology ETF (XNTK) is an equal-weighted ETF that holds stocks of “35 leading U.S.-listed technology-related companies.” 
 
It pulls stocks from the tech and consumer-discretionary sectors that fit certain criteria. According to the ETF issuer, companies in the fund must meet at least one of the following three revenue-based criteria: “have an increase in sales over the last 12 months; have only one consecutive quarter of negative sales growth over the last two years; or have revenue totals from the last four quarters that classify it within the top 75 companies within the specific industry classification designated to it by the index provider.” 
 
XNTK is up 58% so far this year.

iShares US Technology ETF (IYW)

The $13 billion iShares US Technology ETF (IYW) is a much broader ETF than the others mentioned so far. The fund has 133 holdings which are pulled from the Russell 1000 Index.  

IYW has more than double the number of holdings as XLK, and that more expansive portfolio has helped the ETF outperform its rival this year with a 58% gain.

Invesco Nasdaq Internet ETF (PNQI)

The $624 million Invesco Nasdaq Internet ETF (PNQI) tracks the Nasdaq CTA Internet Index, which measures the performance of “companies engaged in Internet-related businesses that are listed on the New York Stock Exchange, NYSE American, Cboe Exchange or Nasdaq.” 
 
Top holdings include Meta, Microsoft, Adobe Inc., Amazon and Alphabet. As an internet ETF, PNQI’s portfolio doesn’t include key tech stocks like Apple and Nvidia, but that hasn’t stopped it from outperforming this year with an impressive 53% return. 

Technology Leveraged ETFs

The best performing tech ETFs mentioned in our list don’t include leveraged funds. Adding leverage to the mix results in a completely different list. 

For instance, the GraniteShares 1.5x Long NVDA Daily ETF (NVDL) is up a whopping 425% this year. NVDL is a highly risky single-stock ETF that’s designed for aggressive short-term traders. 

Sumit Roy is the senior ETF analyst for etf.com, where he has worked for 13 years. He creates a variety of content for the platform, including news articles, analysis pieces, videos and podcasts.

Before joining etf.com, Sumit was the managing editor and commodities analyst for Hard Assets Investor. In those roles, he was responsible for most of the operations of HAI, a website dedicated to education about commodities investing.

Though he still closely follows the commodities beat, Sumit covers a much broader assortment of topics for etf.com, with a particular focus on stock and bond exchange-traded funds.

He is the host of etf.com’s Talk ETFs, a popular video series that features weekly interviews with thought leaders in the ETF industry. Sumit is also co-host of Exchange Traded Fridays, etf.com’s weekly podcast series.

He lives in the San Francisco Bay Area, where he enjoys climbing the city’s steep hills, playing chess and snowboarding in Lake Tahoe.