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Seven of the Best Technology ETF Stocks You Should Invest In

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Apr. 26 2021, Published 9:31 a.m. ET

There are 68 ETFs that focus on companies in the technology sector. The companies deal in hardware, software, cloud computing, semiconductors, and information technology. 

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Over the past year, the technology sector has outperformed the broader market. Tech stocks provide benefits for investors when the economy has a falling U.S. dollar and increasing GDP, Morgan Stanley investment strategist Jodie Gunzberg told U.S. News & World Report.

So, if you are interested in putting your money in technology, here are seven of the best technology ETF stocks to invest in. 

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Technology Select Sector SPDR Fund (XLK)

Established in 1998, the Technology Select Sector SPDR Fund (XLK) represents the tech sector of the S&P 500 Index. Most of XLK's holdings are in Apple (21.89 percent) and Microsoft (20.39 percent). The other holdings include Salesforce, Intel, and Cisco Systems. This ETF has over $38 billion in assets under management and the expense ratio is 0.12 percent. 

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Global X Cloud Computing ETF (CLOU)

The Global X Cloud Computing ETF (CLOU) looks to benefit from the increasing use of cloud computing technology. CLOU focuses its investments on companies that offer SaaS (Software-as-a-Service), managed server storage space, cloud computing hardware, and more. The top holdings include Dropbox, Twilio, and Proofpoint. Its net assets are over $1.3 billion and the expense ratio is 0.68 percent. 

Invesco QQQ Trust (QQQ)

The Invesco QQQ Trust (QQQ) is an ETF that tracks the Nasdaq 100 Index. The information technology sector makes up 47.9 percent of this fund’s investments. Its 102 holdings include Apple, Microsoft, Amazon, Tesla, and Google. The expense ratio is 0.20 percent.

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iShares Expanded Tech Sector ETF (IGM)

With over $3.3 billion in assets, the iShares Expanded Tech Sector ETF (IGM) puts its investments in hardware, software, internet marketing, interactive media, and other related companies. Its holdings also include U.S. tech giants like Microsoft, Apple, and Google. The expense ratio is 0.46 percent.

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First Trust Dow Jones Internet Index Fund (FDN)

The majority of the 42 holdings of the First Trust Dow Jones Internet Index Fund (FDN) are in internet companies like Amazon, Facebook, Google, and Twitter. The fund seeks to track the Dow Jones Internet Composite Index. It has net assets of over $10 billion and an expense ratio of 0.52 percent. 

First Trust Cloud Computing ETF (SKYY)

With a focus on cloud computing companies, the First Trust Cloud Computing ETF (SKYY) seeks to track the ISE CTA Cloud Computing Index. Securities are put into three business categories—IaaS (Infrastructure-as-a-Service), PaaS (Platform-as-a-Service), or SaaS. The holdings include Oracle, VMware, and Rackspace Technology. The fund's net assets top $6.2 billion and the expense ratio is 0.60 percent. 

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iShares U.S. Technology ETF (IYW)

The iShares U.S. Technology ETF (IYW) invests in U.S. electronics, computer software and hardware, semiconductors, and informational technology companies. With 159 holdings, the fund has net assets of over $7.3 billion. Its benchmark is the Dow Jones U.S. Technology Capped Index. The expense ratio is 0.43 percent. 

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