Tech ETFs, or exchange-traded funds, allow you to invest in an assortment of technology stocks in a single investment.
There have been some massive winners in the tech sector in recent years, but there has also been considerable turbulence. On the one hand, exciting new technologies such as artificial intelligence (AI) have created numerous potential investment opportunities. On the other hand, stock market volatility makes many investors hesitant to pick individual tech stocks.
Exchange-Traded Fund (ETF)
That's where exchange-traded fund (ETF) investing comes in. An ETF allows you to invest in a specific area of the stock market without the downsides of picking individual stocks.
There are several excellent ETFs that focus on either the overall tech sector or a specific subsector. In this article, we'll discuss seven top tech ETFs that are worth a closer look right now.
7 top tech ETFs for 2026
Let's take a closer look at each of these ETFs:
1. Vanguard Information Technology ETF
Vanguard is well-known for its low-cost index funds. The Vanguard Information Technology ETF (VGT -0.84%) certainly falls into this category, with a rock-bottom 0.09% expense ratio. This means that for every $10,000 you invest, your annual fund expenses are just $9. (Note: An expense ratio isn't a fee you have to pay. It will simply be reflected in the ETF's performance over time.)
This ETF tracks a broad index of U.S. tech companies of all sizes. However, it is a market-cap-weighted ETF, so its top holdings account for a larger share of its assets. In fact, the top three holdings account for almost 45% of the fund's total assets:
In short, this ETF is an excellent choice for investors who want a set-it-and-forget-it way to invest in the overall information technology sector.
Asset
2. Technology Select Sector SPDR ETF
The Technology Select Sector SPDR ETF (XLK -0.96%) is offered by State Street (STT -0.35%). It is very close to the Vanguard fund, offering a similar asset size, a low 0.08% expense ratio, and a similar benchmark index. In fact, the fund's top holdings (and their respective weights) are almost identical to the Vanguard example.
Both ETFs give you broad exposure to the information technology sector. It's tough to say which is better than the other. Investors who want to invest in tech stocks will not go wrong with either.
3. VanEck Semiconductor ETF
Now, we're getting into more specific ways to invest in tech stocks through ETFs. The VanEck Semiconductor ETF (SMH +1.45%) tracks an index of semiconductor manufacturers, commonly known as chipmakers. This can be an excellent way to invest in AI technology without having to buy individual stocks.
Semiconductor
How to invest in tech ETFs
- Open your brokerage account: Log in to your brokerage account where you handle your investments. If you don't have one yet, take a look at our favorite brokers and trading platforms to find the right one for you.
- Search for the stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.
- Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
- Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
- Submit your order: Confirm the details and submit your buy order.
- Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.
Risks and challenges
Benefits and risks of investing in tech ETFs
Tech ETFs can be excellent ways to invest in the market's most exciting growth opportunities without being too dependent on any single company.
On the other hand, there are some key risk factors to keep in mind. Specific risks and challenges to consider when investing in tech ETFs include:
- Company concentration: One of the main reasons to invest in ETFs is to minimize your exposure to any single stock, but as you've seen with some of these ETFs, the exposure to mega-cap tech stocks like Nvidia and Microsoft can be substantial.
- Sector concentration: If AI investment slows down, for example, your investment could suffer more than if you owned a diversified index fund.
- Valuation risk: Technology stocks (especially in 2026) tend to command premium valuations due to the growth of AI and other tech trends.
The bottom line on investing in tech ETFs
As you can see, not all tech ETFs are identical. Some track a broad index of tech companies. Others track more specialized baskets of stocks. And some take an actively managed approach or weigh their portfolios differently. The best course of action if you're considering adding some tech exposure to your portfolio is to compare each to see which is best suited to your goals and risk tolerance.
Related investing topics
FAQ
Tech ETF FAQ
About the Author
Matt Frankel, CFP has positions in Amazon. The Motley Fool has positions in and recommends ASML, Alphabet, Amazon, Apple, Applied Materials, CRISPR Therapeutics, Hewlett Packard Enterprise, Microsoft, Nvidia, Roku, Taiwan Semiconductor Manufacturing, Tesla, Texas Instruments, and Varonis Systems. The Motley Fool recommends Broadcom and Coinbase Global and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
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