ETF for technology tilt

I’ve been investing in a bunch of single tech stocks to add technology tilt to my portfolio (FAANGs & co) and would like to rebalance and consolidate this part of my part into 1-2 ETFs

But struggling to find a perfect choice for that. Technology ETFs like XLK and VGT have weird selection criterias that don’t include even half of FAANG. QQQ’s portfolio is better, but it’s bit expensive (0.20% TER), i don’t like some junk like TSLA in it, and lack of some good non-nasdaq stuff…

What ETFs are you using for technology tilt in your portfolio?

I’m using Value Factor ETFs (as a complement to MSCI USA) to tilt myself away from tech stocks, so my best guess would be to use a Growth Factor ETF? :grin:

I would still look inside to check that they have more tech stocks than vanilla USA stock ETFs though.

Maybe you can do a mix with VGT (tech) and VOX (or FCOM, XLC) (communication), or take a growth fund.
In any case, on the US market, the only ETF tracking the NASDAQ is QQQ.

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Telecom etfs are even more weird. Mixing faangs and some other comparable companies with telecom (Verizon, AT&T, Comcast, etc) that have very different fundamentals. QQQ sounds like the lesser evil, despite an occasional junk in the top.

Growth factor etfs are seem like they are only about half tech - tech heavy at the top.

But why? Tech is the best thing happened to stock markets in the last decades. It’s expensive for a reason - noone’s selling quality companies for cheap. Why load up on cheap junk instead?

That’s a very good question. I’m trying not to put all my eggs in the tech basket. Over decades companies and sectors come and go. Jason Zweig wrote a nice article about it this week. Exxon Mobil was #1 for several years, now it’s not even in the DJIA any more.

In general I still support buying the market as it is. I do have a lot of tech stock exposure and my value tilt is rather marginal. But I also want to be prepared in case there is unexpected development, because I do not feel comfortable with a single sector having so much importance, at the same time as a single country has more than half of the developed market’s cap.

If you look at MSCI World, as few as 5 companies have 15% of the weight, and they are in the same country and sector. That’s what is called a “Klumpenrisiko” and I want to make sure I manage that risk. The same goes for the top 3 Swiss companies in the SMI (with an even bigger importance) and that’s why SIX decided to cap them.

One of the arguments behind the value tilt is also that a good company is not always a good stock because it can be overpriced. Even with tech dominating, people still need to drink water, to eat food, to move around, to have electricity, the Internet, gas, heating, houses to live in, to buy cars, to be insured… If these sectors are neglected, this makes them very attractive as an investment, and even more so as the defensive sectors providing the basics fluctuate less in a crisis.

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Performance chasing.

Exactly. Which is the same as risk minimization from my perspective. :grinning:

Afaik theres FNGU and FNGD which track tech stocks with 3x leverage xD

I need the ETF for long term holding to avoid triggering capital gains (going to be non-CH resident soon, so have to take that into consideration). Leveraged ETFs are a bad idea for the long term, it’s for people who are bad at math.

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The wise read:

The read you might be searching (and using TQQQ instead of UPRO):
https://www.bogleheads.org/forum/viewtopic.php?t=272007

Disclaimer (it’s currently in on this forum to put one at the end of each post): i am not a blablabla…choose wisely.

Ps: i use ARQQ (for fun money)

Pps: Ideas for Fun fund in Tech

What exactly did you want me to take away from this read? I already knew tech is outperforming, no news.

I cannot use leveraged ETFs due to my long term holding constraints

ARKQ? Pretty expensive at 0.75% TER and some of top holdings aren’t exactly the kind of tech I’m interesting in (asset light, highly profitable enterprises with great margins)

I use leverage ETFs for the long term

That tech will start to underperform sooner than later. Even more for the long run i would not tilt to tech sector.

How about PSLDX ?

You are not alone :kissing::

Well this is the bit that I disagree with. My thesis is tech/software will continue eating the world for at least a few more decades. It’s profitable, growing, asset light, high margin industry. Besides the (justifiably) high price, what’s not to like? “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”

I don’t exactly understand what’s its holding and what is its strategy. But it doesn’t seem to be tech - fact sheet says tech sector percentage is about the same as in s&P500 (25-27%). Anyway, as a US mutual fund it’s open for business only with US residents.

I like this one, focussed on “robotics and automation”.
Has a fair mix of companies I wouldn’t mind to own individually as well (NVDA, AAPL, ADSK, NOW, ISRG etc.).
So I might pop it up for a few % of my portfolio “for fun”.

https://www.ishares.com/ch/individual/en/products/284219/ishares-automation-robotics-ucits-etf-usd-acc-fund

But for some reason it’s not available on US stock exchanges.
Where would you grab it?

Although I am confused because there is also this - is it the same thing? :smiley: (holdings look different)

Way too expensive (0.45% TER). Personally even QQQ is a tad on the expensive side for me

Where’s FB and alphabet? And what’s up with xiaomi at #1 holding? They make products I want to buy, but are NOT a business I’d want to buy. Commoditized hardware business, they usually suck, razor thin margins (and NOT in a good amazon way) and very tough competition.

It is not a US ETF so why would they have? American stocks only. Or at least american depository receipts.

I think I’m going to load up on VUG if market drops further. 0.04% TER and all the good companies I like in the tpo.

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Bought some MGK in the end. Only a slightly higher TER, but also more concentrated in mega caps (FAANGS). Closest portfolio to QQQ that I could find

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