2 ETFs That Give You Exposure to the Latest Trends in Tech

Keeping up with the latest tech trends can be challenging, but doing so can allow you to rake in significant returns in the long run. The problem, however, is that even if you find the next big area of tech to focus on, you also have to decide which stock to buy, since not every business involved is going to be a winner. Ultimately, you can be left with a fairly complex and time-consuming process in order to find the next promising tech stock to own.

This is where utilizing an exchange-traded fund (ETF) can be a great option. ETFs can be used to track the S&P 500 and give you a position in hundreds of stocks. They can also allow you to focus on specific themes, industries, and growth opportunities. A couple of ETFs you may want to consider adding to your portfolio if you want some great exposure to tech include the Robo Global Robotics and Automation Index ETF (ROBO -0.67%) and Defiance Quantum ETF (QTUM -0.67%).

Robo Global Robotics and Automation Index ETF

The Robotics and Automation ETF centers around some hot investing themes in tech. The fund invests in companies that it says are “driving transformative innovations in robotics, automation, and artificial intelligence.” And with 82 holdings in its portfolio, you can get a great mix of different tech stocks with this investment.

What’s appealing about this fund is that it isn’t heavily focused on big names like Nvidia or Microsoft. You actually won’t find those stocks among its top holdings (Nvidia is included in its portfolio, but Microsoft is entirely absent). Instead, the fund’s largest positions are in Symbotic, Celestica, and Joby Aviation. But no single stock makes up even 3% of its portfolio, making this ETF an excellent option if you don’t want to be heavily dependent on just the big players in tech.

One downside is that the fund’s expense ratio is a bit high, at 0.95%, or $95 annually per $10,000 invested. However, with the growth potential the fund possesses in the long run, the gains may end up more than offsetting the fees you incur from the ETF anyway.

Over the past five years, the ETF climbed by 34%, which is lower than the S&P 500‘s gains of over 90% during that period. But there’s still much more growth ahead for many of the stocks in this ETF, and their best days are likely still to come, which is why this fund can be a great investment to hang onto for the long haul.

Defiance Quantum ETF

If you’ve heard about quantum computing and are excited about it, then the Defiance Quantum ETF can be a great addition to your portfolio. Quantum computing has the potential to revolutionize the tech industry by equipping companies with much more computing power, which can be crucial given the vast needs of artificial intelligence chatbots.

The Defiance ETF has a position in 77 stocks. While they aren’t all pure-play quantum computing stocks, it invests in companies that will benefit from quantum computing and products and services related to it. Chipmakers Nvidia and Advanced Micro Devices are included in the ETF, and so is data analytics company Palantir Technologies. There are also stocks involved with the actual development of quantum computers, including Rigetti Computing and Ionq.

There’s a good, vast mix of tech stocks in here, and the fund’s largest position is in Synopsys, which accounts for just under 2% of the ETF’s entire portfolio. Having a balanced mix of stocks gives investors some excellent diversification. The fund’s expense ratio of 0.40% is fair and a bit more modest than the Robo ETF.

In five years, the Quantum ETF has risen by around 180%. Its early gains are impressive, and with more growth still potentially out there, it may not be too late to invest in it.