Best Performing Tech ETFs 2Q 2019

Running down the best-performing ETFs within 2019’s top sector to date.

sumit
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Senior ETF Analyst
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Reviewed by: Sumit Roy
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Edited by: Sumit Roy

The new, revamped technology sector hasn’t lost a beat. The pared-down sector, which lost some of its key constituents following changes to the Global Industry Classification Standard (GICS) last September, has been handily outperforming the broader stock market and every other sector so far in 2019.

The Technology Select Sector SPDR Fund (XLK), which tracks the tech sector within the S&P 500, is up 26.4% this year, topping the 17% gain for the broad stock market index.

The loss of heavyweights like Alphabet and Facebook to the new communication services sector didn’t dampen returns one bit.

 

(Use our stock finder tool to find an ETF’s allocation to a certain stock.)

 

In fact, XLK is beating its fellow Communication Services Select Sector SPDR Fund (XLC) by six percentage points in returns this year.

Broad Tech ETFs Tough To Beat

XLK is one of 72 technology ETFs traded on U.S. exchanges. It, along with the even broader Vanguard Information Technology ETF (VGT), are the largest ETFs in the space, both with about $20.8 billion in assets under management.

For liquid, diversified exposure to the tech sector, those funds are hard to beat. Similarly, their performance so far this year, up 26.4% and 27.2%, respectively, has also been tough to beat.

Not many tech ETFs can claim substantially higher returns. Five leveraged ETPs, including the Direxion Daily Semiconductor Bull 3X Shares (SOXL), up 127.9%, and the Direxion Daily Technology Bull 3X Shares (TECL), up 90.9%, have done better.

But take leverage out of the equation and the returns are much more in line with XLK and VGT.

 

Top-Performing Technology ETFs (excluding leveraged/inverse)

TickerFundYTD Return (%)
SOXX iShares PHLX Semiconductor ETF35.41
FTXL First Trust Nasdaq Semiconductor ETF34.93
XSD SPDR S&P Semiconductor ETF34.52
PTF Invesco DWA Technology Momentum ETF33.89
CHIK Global X MSCI China Information Technology ETF33.47
SMH VanEck Vectors Semiconductor ETF33.42
OGIG O'Shares Global Internet Giants ETF31.80
PSI Invesco Dynamic Semiconductors ETF30.92
XITK SPDR FactSet Innovative Technology ETF30.76
QTEC First Trust NASDAQ-100 Technology Sector Index Fund30.45
XSW SPDR S&P Software & Services ETF30.35
KWEB KraneShares CSI China Internet ETF29.92
TTTN TigerShares China-U.S. Internet Titans ETF29.80
AIQ Global X Future Analytics Tech ETF29.78
PSJ Invesco Dynamic Software ETF29.58

Data measures total returns for the YTD period through 5/2/2019

Chipmakers Bounce Back

Excluding inverse/leveraged products, the top tech fund of the year is the iShares PHLX Semiconductor ETF (SOXX), with a gain of 35.4%.

Shares of chipmakers like Qualcomm and Nvidia moved sharply higher in 2019, recovering from a dismal fourth quarter, as fears about the global economy abated. In addition to SOXX, the First Trust Nasdaq Semiconductor ETF (FTXL), the SPDR S&P Semiconductor ETF (XSD) and the VanEck Vectors Semiconductor ETF (SMH) have also outperformed this year.

Going further down the list are a handful of China tech ETFs, with returns of as much as 33.4%. Separate from the U.S. tech sector, Chinese tech stocks have nonetheless been a hot place to be. The Global X MSCI China Information Technology ETF (CHIK) exposes investors to these stocks—including Lenovo, Sunny Optical and Xiaomi—which were hammered last year due to trade war concerns, but have since bounced back.

Software ETFs On A Roll

Along with semiconductors, another area of tech that’s been rolling this year is software. From MongoDB to Twilio to Adobe, software stocks—especially those tied to the cloud—have been on a tear.

That’s in large part why the SPDR S&P Software & Services ETF (XSW) and the Invesco Dynamic Software ETF (PSJ) are among the top-performing tech ETFs of the year.

Software stocks also make up a big chunk of the Invesco DWA Technology Momentum ETF (PTF), which selects tech stocks to hold based on price momentum.

Atypical Tech ETF

Another fund worth mentioning in the O’Shares Global Internet Giants ETF (OGIG). The fund, which is less than a year old, outperformed this year thanks to heavy positions in FAANG stocks like Facebook, Amazon, Alphabet and Netflix.

 

(Use our stock finder tool to find an ETF’s allocation to a certain stock.)

 

None of those companies are in the technology sector as defined by GICS, but many investors still consider them tech stocks. OGIG is up 31.8% so far this year.

 

Top-Performing Technology ETFs (leveraged)

TickerFundYTD Return (%)
SOXL Direxion Daily Semiconductor Bull 3X Shares127.89
TECLDirexion Daily Technology Bull 3X Shares90.95
CWEBDirexion Daily CSI China Internet Index Bull 2X Shares62.55
USD ProShares Ultra Semiconductors61.82
ROM ProShares Ultra Technology56.44

Email Sumit Roy at [email protected] or follow him on Twitter @sumitroy2

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.