Best Technology ETF UK – Compare Top ETFs 2021

As the tech market is exploding in recent years, investing in one of the best technology ETFs in the UK might be a smart decision going forward. In this guide, we’ll list the most popular technology ETFs and review each one of them. We’ll also suggest top UK brokers to start trading with and determine whether it is a smart decision right now to invest in technology ETFs.

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Best Technology ETF UK 2021 List

If you are looking for the best technology ETF UK and placing an order in the market, below you can find our list of the top 10 picks to invest in right now.

  1. Vanguard Technology ETF (NYSE: VGT) – Overall Best Technology ETF UK – Invest Now
  2. The Technology Select Sector SPDR ETF (NYSE:XLK) – Best Tracking Technology ETF – Invest Now
  3. Invesco QQQ ETF – Best for Investing in Large Cap Tech Companies – Invest Now
  4. Invesco China Technology ETF (NASDAQ: QQQ) – Best TechnolOgy ETF in China
  5. ARK Autonomous Technology & Robotics ETF (BATS:ARKQ) – Best for Vehicles & Automation
  6. ProShares Ultra Technology (NYSE: ROM) – Best Leveraged Technology ETF
  7. The ARK Fintech Innovation ETF (NYSE: ARKF) – Best Fintech Technology ETF
  8. The Amplify Transformational Data Sharing ETF (NYSE: BLOK) – Best Blockchain Technology ETF
  9. Fidelity MSCI Information Technology Index ETF (NYSE: FTEC) – Best Information Technology (IT) ETF 
  10. ProShares UltraShort Technology (NYSE: REW) Best Short-Sell Technology ETF  

Best Technology ETFs UK Reviewed

As you can see from our list above, there’s a wide variety of technology ETFs to choose from in the US stock market. In that aspect, it can be a challenge to analyze each one of the ETFs and choose the one ETF that meets your investment goals.

To help you get more information about each technology ETF, we have reviewed and analyzed each one of them, including the price-past performance, the impact of the Covid-19 pandemic crisis, the expense ratio, and the dividend payout.

1. Vanguard Technology ETF – Overall Best Technology ETF UK

The Vanguard Technology ETF is one of the most popular ETFs in financial markets with total net assets of nearly $48 billion. VGT has major holdings in Apple (19.64%), Microsoft (15.90%), and some minor holdings in NVIDIA, Visa, Mastercard, PayPal, Intel, Adobe, etc. Overall, the fund has holdings in 343 tech-related companies. Additionally, the fund has a low expense ratio of just 0.10% and an annual dividend yield of around 1.2%.

The ETF is listed on the New York Stock Exchange under the ticker symbol VGT and is considered as one of the best ETFs in the market. It is also one of the most liquid ETFs in the market with an average volume of 600K, which makes it a great underlying asset for day trading investment strategy. This ETF is also the perfect security for those who are looking for diversification in the tech sector.

In terms of market performance, the Vanguard Technology ETF has generated a 1-year total return of over 80% since the Covid-19 pandemic started in March last year. Looking ahead, its 1-year share price forecast stands at around 412 and the 5-year forecast at 653.

The Vanguard Technology ETF all time chart

If you want to invest in this fund, the easiest way to do that is via eToro that allows you to make an initial investment with just £35 and without paying any commissions.

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2. The Technology Select Sector SPDR ETF – Best Technology ETF for Tracking Technology and Telecom Sectors

Another popular technology ETF to consider is the Technology Select Sector SPDR ETF (NYSE: XLK). This fund simply tracks the market performance of the Technology Select Sector Index, which is comprised of big semiconductor technology and telecom companies of the S&P 500. The fund was founded way back in 1998 and has similar holdings to the Vanguard Technology ETF but it is more focused on large-cap technology companies. When we compare the two ETFs, XLK holds only 75 companies while the VGF has a number of 343 technology stocks. Nonetheless, the market performance of XLK is very similar to VGT with a 1-year return of 75%.

The Technology Select Sector SPDR ETF all time chart

In terms of the specifics, the Technology Select Sector SPDR ETF has a market valuation of around $37 billion, and the fund charges 0.12% per year to manage the portfolio. Also, it pays an annual dividend of 1.3%.

All things considered, the Technology Select Sector SPDR ETF is one of the best options to get exposure to large-cap technology companies. This best SPDR ETF UK also has options available which might be useful to get an indication about future price movements.

71.2% of retail investors lose money trading CFDs at this site.

3. Invesco QQQ ETF – Best for Investing in Large Cap Tech Companies 

With about $150 billion in assets under management, the Invesco QQQ ETF is one of the largest Investment Trusts in the world. The idea of this fund is simple – the Invesco QQQ tracks the Nasdaq 100 index, so it basically invests in all the 100 largest technology companies in the world. This includes Apple, Microsoft, Amazon, Tesla, Alphabet, Facebook, PayPal, NVIDIA, Intel, and more.

The expense ratio of 0.20% is a bit pricey when compared to other ETFs on our list, however, it is still a fairly low management fee, in particular when taking into consideration an annual dividend payout of around 0.6%.

Another great aspect of this ETF is that it’s easy to analyze and find information that helps you take trading decisions. After all, this ETF basically tracks the NASDAQ 100, which is a very popular index. Much like the NASDA100, the ETF has generated a return of 86% over the last year.

Invesco QQQ ETF all time chart

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4. Invesco China Technology ETF – Best Technology ETF in China

Like many other sectors, China is a technology leader. And, in recent years, Chinese companies have been further expanding their influence in the global economy, particularly in the eCommerce market. So, this is the ideal ETF if you want to invest in Chinese leading technology companies like Baidu, Tencent Holdings Ltd, Meituan, Sunny Optical Technology (Group) Co Ltd, LONGi Green Energy Technology, Autohome Inc, JOYY Inc, GDS Holdings Ltd, and more.

This fund was established in 2009 and trades on NYSE under the ticker symbol CQQQ. Overall, it has 108 Chinese technology stocks and is by far the best option to get exposure to the Chinese tech industry. As a matter of fact, this fund outperformed the vast majority of other ETFs in our list, including the Invesco QQQ (NASDAQ100). The fund’s 1-year return stands at 90%, rising from 48 to around 84 at the time of writing.

Invesco China Technology ETF all time chart

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5. ARK Autonomous Technology & Robotics ETF – Best Technology ETF for Autonomous Vehicles, Robotics, and Automation

Different from most of the ETFs in our list, the ARK autonomous Technology & Robotics ETF is very unique in terms of vision and future goals. This ETF invests in companies associated with autonomous transportation, robotics and automation, 3D printing, energy storage, and space exploration.

Generally, if you are thinking to invest in autonomous cars, then this ETF is perhaps the best option available in the market. The fund holds companies like Tesla, Baidu, Trimble, JD.com Inc ADR, Deere & Co, Kratos Defense & Security Solutions Inc, Alphabet Inc Class C, Teradyne Inc, etc. From the previous year, the fund’s 1-year return stands at 188.08%, largely due to the incredible surge of the TSLA stock of 507% (1-year return).

ARK Autonomous Technology & Robotics ETF all time chart

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6. ProShares Ultra Technology – Best Leveraged Technology ETF

The ProShare Ultra Technology is the perfect solution if you want to take more risk in your investing strategy. This ETF allocation seeks a return that is 2x the return of its underlying benchmark, the Dow Jones U.S. Technology Index. By using leverage with an ETF, you can increase your returns but also your potential losses. This means that while it offers high rewards it also carries high risk. For example, if you would invest in this fund on the same date a year ago, you could receive a return of around 235%.

The fund has a total number of 158 companies and a modest net asset of nearly 700 $million. Crucially, this ETF is a bit more expensive than some of the other technology ETFs out there with an expense ratio of 0.95%. Nonetheless, with a potential annual return of around 235%, the expense ratio is obviously not a big issue.

ProShares Ultra Technology all time chart

Finally, investing in ProShare Ultra Technology ETF enables investors getting a yearly dividend yield of 0.8%. Additionally, if you decide to invest in this fund via Capital.com, which is one of the few online trading platforms in the UK allowing users to trade this ETF, you’ll be able to trade with additional leverage of 5:1.

71.2% of retail investors lose money trading CFDs at this site.

7. The ARK Fintech Innovation ETF – Best Fintech Technology ETF

The ARK Fintech Innovation ETF is a very interesting fund that invests at least 80% of its assets in financial services technology innovation companies. As such, it holds stocks like Square Inc A, PayPal, Zillow Group Inc C, Silvergate Capital Corp Class A, Intercontinental Exchange Inc, Tencent Holdings Ltd ADR, Sea Ltd ADR, Pinterest, Shopify, and more.

As a result of the e-Commerce boom since the coronavirus pandemic emerged, the fund has gained an outstanding return of over 192% since March 2020. It also has an expense ratio of 0.75%, and an annual dividend yield of 0.37%. Like many other ARK funds, the ARK Fintech is known as an aggressive fund and is most suited for investors that want to get exposure to Fintech solutions and online applications. All in all, it holds 47 stocks in its portfolio and provides investors with a diversification of risk in this fund.

The ARK Fintech Innovation ETF all time chart

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8. The Amplify Transformational Data Sharing ETF – Best Blockchain Technology ETF

This is one of our favorite ETFs on the list as it offers investors a way to get exposure to companies that are engaged in blockchain technology development. The BLOK fund is listed on NYSE and has a market valuation of around $1.1 billion. Some of the ETF’s holdings include MicroStrategy Inc Class A, Argo Blockchain PLC, HIVE Blockchain Technologies Ltd, Riot Blockchain Inc, Grayscale Bitcoin Trust (BTC), and more.

With the hype around bitcoin and blockchain technology, it might be worth considering the Amplify Transformational Data Sharing ETF. The fund has generated a 1-year return of over 300% and its YTD return currently stands at 55%. Further, the fund offers a 1.23% annual dividend yield and carries an expense ratio of just 0.71%.

The Amplify Transformational Data Sharing ETF all time chart

Unlike other ETFs, this fund provides investors the opportunity to invest in bitcoin and Blockchain-related companies. And though it is a volatile ETF, it is far more stable than bitcoin and other cryptocurrencies.

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9. Fidelity MSCI Information Technology Index ETF – Best Information Technology ETF

With an extremely low expense ratio of just 0.08% and a 1-year return of over 90%, it is no wonder the Fidelity MSCI Information Technology Index ETF (NYSE: FTEC) is one of the most popular tech ETFs. This best MSIC world index ETF tracks the performance of the MSCI USA IMI Information Technology index, which is designed to capture the large, mid, and small-cap US technology companies.

The fund is somewhat similar to NASDAQ 100 – it has major holdings in Apple, Microsoft, NVIDIA, Visa, Mastercard, PayPal, Intel, Adobe, Salesforce.com, Cisco Systems, and more. Overall, the FTEC has a total of 332 stocks in its portfolio.

Fidelity MSCI Information Technology Index ETF all time chart

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10. ProShares UltraShort Technology Best Short-Sell Technology ETF

Finally, if you believe tech stocks are currently overvalued, the ProShares UltraShort Technology is the way to play it. Opposite to the ProShare Ultra Technology, this ETF corresponds to two times the inverse (-2x) of the daily performance of the Dow Jones U.S. Technology Index. This means that not only you’ll make a profit when tech stocks fall but you are actually invested in a leverage position.

For those unaware, short selling is the practice of selling an asset that you do not own, with the intention to buy it back at a lower price and hence make a profit when the value of an asset drops. In that regard, there are two options to short sell the tech sector – the first is by buying put options on one of the tech-related indices and the second option is to buy an inverse ETF like the ProShares UltraShort Technology ETF.

What’s more? The ETF is listed on the NYSE under the symbol REW. It has an expense ratio of 0.95% and a total net asset of approximately $7 million. Obviously, the fund has had a negative return over the past year of around -80%. Nonetheless, if you think a tech stock bubble may be on the verge of bursting soon, then this is the best asset to buy.

ProShares UltraShort Technology all time chart

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Are Technology ETFs a Good Investment?

Technology stocks have always been the most dynamic of all the sectors and typically, technology ETFs offer investors a lot of opportunities. We very often hear stories about people who made a great investment by buying tech stocks like Apple, Google, Microsoft, Tesla, and many other technology companies. And, this trend is still going strong.

In general, technology public traded companies can be everything from small start-up companies, to mid-size and large-cap firms like Amazon, Alphabet, Apple, and Tesla. But if you have concerns about investing in one individual tech stock due to the high valuation, the best solution is to invest in a technology ETF in order to diversify your portfolio and reduce your risk.

As for tech stocks – many analysts are trying to figure out the tech boom in recent years, particularly since April 2020 when the coronavirus pandemic emerged. Some even believe that there’s currently a bubble in US tech stocks, much like the famous dot.com bubble in 2000. A look at the chart below of the NASDAQ-100 Technology Sector Index (NDXT) shows that tech stocks are indeed in an incredible run. 

NASDAQ-100 Technology Sector Index (NDXT) chart

On the other side of the fence, despite the forecast of some analysts of a bubble burst in technology stocks, other analysts and investors predict that technology stocks will keep outperforming other sectors. Notably, eCommerce stocks like Amazon, Chewy, and eBay surged during the pandemic in what is called the eCommerce boom. Ironically, the coronavirus pandemic has changed the behavior toward online channels and increased the sales of most technology companies around the world.

Obviously, you can find many generic ETFs to invest in like the best S&P 500 ETFs, oil ETFs, gold ETFs, and silver ETFs. However, despite the high volatility, the tech sector is the most valuable and dominant of all other sectors.

Best Technology ETF UK Investment Platforms 2021

As we mentioned previously in our guide, you need to find a reliable and trusted trading platform in order to invest in technology ETFs. There are many factors to consider when you look for a stock broker or stock app such as the selection of assets, the fees and commissions, and the tools and platform provided by the brokerage firm.

To narrow down your search results, below we review two of the most popular online trading platforms in the UK to buy and sell technology stocks and ETFs.

1. eToro – Overall Best Broker to Buy Technology ETF UK

Invest in the best biotech stocks UK on eToroeToro is among the most popular online trading platform in the UK and globally with more than 17 million registered members on its network as of 2021. This FCA-regulated broker, which was founded in 2006, offers an extensive selection of 249 Exchange Traded Funds including some of the most popular technology ETFs in the market. eToro also offers users to buy shares, and other assets like indices, commodities, digital assets, and FX currency pairs. 

When it comes to technology ETFs at eToro, the broker offers a great selection that includes Vanguard Technology ETF, Invesco QQQ, Invesco China Technology ETF, the Technology Select Sector SPDR ETF, ARK Autonomous Technology & Robotics ETF, the Amplify Transformational Data Sharing ETF, and more. Crucially, eToro offers leverage of 5:1 on ETFs and stocks, so you’ll be able to invest in these ETFs with a portion of just 20% of the total value of the transaction.

Being a CFD platform, eToro also does not charge any trading fees like traditional brokerage firms. Also, there are no account management fees, rollover fees, and no ticket fees. Instead, it only charges the buy and sell spread.

eToro commission free

Besides ETFs, eToro also offers trading on FX currency pairs, commodities, stocks indices, cryptocurrencies, and stocks. But another unique way to get exposure to technology stocks on eToro’s platform is by buying built-in managed portfolios offered by the broker’s analysts. For example, you can invest in the following portfolios: Driverless, Crispr, FoodTech, DroneTech, BigTech, and FourBiggestTech.

eToro copyportfolio

Furthermore, eToro’s best feature is the social trading tools that are extremely useful for beginner investors. That said, the eToro’s platform could also be beneficial for experienced investors that can get rewards for allowing other users to copy their trades. By using the famous CopyTrade tool, users at eToro can basically share trading ideas and essentially apply ‘social trading’ activity.

In terms of getting started with eToro, you need to meet a minimum deposit requirement of £140 if using the Standard account or a minimum of 5000 USD (which is around 3600 GBP) if you want to use the CopyPortfolio service. The FCA regulated broker supports a range of payment methods including PayPal, credit and debit card, bank wire transfer, Skrill, and Neteller.

Pros:

  • Best trading platform for beginner investors
  • Huge range of 249 ETFs, and built in managed portfolios
  • eToro also offers other markets: stocks, indices, commodities, forex, cryptocurrencies and more
  • More than 2400 stocks listed on the London Stock Exchange and 16 international markets
  • Deposit funds with a debit/credit card, bank wire transfer, and e-Wallet like PayPal.
  • Largest social trading platform in the world. CopyTrading is supported
  • Regulated by the FCA

Cons:

  • Not suitable for advanced traders that like to perform technical analysis

67% of retail investors lose money trading CFDs at this site

2. Capital.com – Trusted CFD Broker to Invest in Technology ETFs

Capital.com commodity brokerEstablished in 2016, Capital.com is another popular CFD trading platform in the UK and globally that offers a nice selection of ETFs and tech stocks to trade on. With this platform, investors get access to more than 3000 financial instruments across various markets that include stocks, ETFs, Forex, commodities, and cryptocurrencies. Much like eToro, Capital.com has a zero-commission model and very competitive spreads. Additionally, the Cyprus-based broker offers a leverage of 5:1 on stocks and ETFs.

The benefit of using Capital.com in order to invest in technology ETFs, or any other asset, is the broker’s easy-to-use and advanced platform that is suited for beginners but also for expert traders. In fact, Capital.com’s trading platform is the first-ever to use Artificial Intelligence technology. This allows users to get personalized trading insights based on their previous trading activity.

Capital.com platform

Another aspect to consider is the news and analysis tools and information offered by Capital.com. From the platform, you can navigate to the ‘Discover’ tab on the left side menu and get access to plenty of tools and data that might help you detect new trading ideas. This includes the ‘News’ and ‘Learn How To Trade’ sections and charts of the most traded, volatile, risers and fallers assets of the day.

Capital.com platform 2

To get started with Capital.com, you can open a paper trading account or deposit a minimum of just £20 to start trading the live markets.

Pros:

  • Huge selection of stocks and ETFs
  • Educational app for new traders
  • Commission-free trading
  • Competitive spreads
  • Leverage of 5:1 on shares and ETFs
  • World’s first AI-powered trading platform
  • Excellent charting and analysis interface
  • £20 minimum deposit

Cons:

  • CFDs only

71.2% of retail investors lose money trading CFDs at this site.

How to Buy the Best Technology ETFs UK

So now that we have made everything clear about the best technology ETFs in the market, and the most recommended trading platforms in the UK, we are going to show you the full process of opening an account and start trading with eToro.

Step 1: Open an Account

The first step you need to take is to visit eToro’s website and register for an online trading account. As such, you need to click on the ‘Join Now’ button on eToro’s homepage and submit your personal details on the registration form.

eToro registration

To complete the registration process, you’ll have to verify your email address in the email sent to you by eToro.

Step 2: Upload ID and Verify Your Identity

In the next step, you need to verify your identity by submitting additional personal information and uploading a copy of your passport or driver’s license and a recently issued bank account statement or utility bill. eToro will then inform you by email once your account is verified.

Step 3: Deposit Funds

eToro allows users to make a deposit in various ways. This includes credit and debit card, e-Wallet (PayPal, Skrill, Neteller), and bank wire transfer. In the UK, the broker maintains a minimum deposit requirement of around £140 to get started.

Step 4: Search for Technology ETF

Now you are ready to make an investment on eToro’s platform. First, you need to search for a technology ETF you want to invest in. For this demonstration, we chose the Vanguard Technology ETF, which is one of the top ETFs available in the market. From the trading dashboard, navigate to the search bar and type in VGT. Then, click on the first result that appears in the drop-down menu.

eToro technology ETF

Step 5: Place a Technology ETF Buying Order

Unlike the vast majority of other online trading platforms, eToro has an instrument page for every asset on its platform. As such, you’ll be transferred to the Vanguard Technology ETF instrument page where you can analyze the instrument by using the news feed, charts, and other analysis tools. Whenever you are ready to make an investment, simply click on the Buy button.

the Vanguard Technology ETF eToro

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You’ll then see an order form where you can enter the details of the transaction. To get an instant market execution, choose the ‘At Market’ in the Rate field and set the value of investments. Otherwise, you can set the rate at which you want to get execution by clicking on the ‘Rate’ button. Either way, to complete your purchase, click on the ‘Place Order’ button and navigate to the Portfolio tab on the left side menu to view your position.

the Vanguard Technology ETF eToro place an order

Conclusion

Clearly, the technology sector is the most lucrative and profitable of all sectors. Tech stocks have always been a huge part of that revolution and in the center of the stage. As such, investing in technology ETFs is a great long-term investment decision. Otherwise, if you have concerns about a tech stock bubble coming soon, you can use an ETF that enables you to make a profit when prices of tech stocks fall.

As we outlined in our guide, you want to make sure you choose the best technology ETF and reliable UK trading platform to execute your ETFs trades. eToro is our personal recommendation due to the extensive selection of 249 ETFs, the zero-commission model, and the plethora of social trading tools it offers.

eToro – Buy Best Technology ETF UK with 0% Commission

67% of retail investor accounts lose money when trading CFDs with this provider.

 

FAQs

What is the best technology ETF?

There are many options to choose from, but the best technology ETF in the market in our view is the Vanguard Technology ETF. This is the most popular and liquid technology ETF with total net assets of nearly $48 billion. On the other hand, if you believe the technology sector may suffer a sell-off in the near future, the best option for you is the ProShares UltraShort Technology.

Are technology ETFs a risky investment?

Well, there's a risk involved in technology ETFs, particularly following the surge over the last year. Nonetheless, the Covid-19 pandemic has had a significant impact on the technology sector, which might push technology ETFs even higher.

What is a leveraged technology ETF?

A leveraged ETF simply means you can increase or reduce the exposure to the underlying index using derivatives. For example, when you are using an ETF like ProShares Ultra Technology, you will get 2x the return of the index. As such, if the Dow Jones U.S. Technology Index rises by 1% in a certain day, the ETF's value will rise by 2%.

How can I short-sell the technology sector?

The best way for you to short sell the technology sector is to invest in ProShares UltraShort Technology that corresponds to two times the inverse of the daily performance of the Dow Jones Technology Index.

Where can I buy technology ETFs?

Basically, the vast majority of brokerage firms offer you to trade technology ETFs as these are extremely popular assets. That said, you want to find an online trading platform that gives you the best trading conditions and tools to get the most out of your investment account. From our research, eToro offers you to buy a huge range of ETFs including most of the ETFs on our list.

Are technology ETFs suitable for long-term investments?

Absolutely. In fact, technology ETFs can be a great investment for long-term investors. ETFs are usually low-cost, tax-efficient, and allow you to diversity your portfolio. When you buy an ETF, you typically buy around 50-350 various companies. If one of these companies will be the next Apple, Google or Tesla, then it is definitely a smart investment.

Tom Chen

About Tom Chen PRO INVESTOR

Tom is an experienced financial analyst and a former grains derivatives day trader specializing in futures, commodities, forex, and cryptocurrency. He has over 10 years of experience in the Finance industry spanning across a day trader position at Futures First, and a web content editor and writer at FXEmpire. Tom is an expert in the areas of day trading and technical analysis as it applies to futures, cryptocurrencies, forex, and stocks. Tom’s primary interests include economics, trading, social-economic systems, technology, and politics. He has a B.A. in Economics and Management, a Journalism Feature Writing certificate from the London School of Journalism. Tom has written for various websites, such as FX Empire, The Motley Fool, InsideBitcoins, Yahoo Finance, and Learnbonds.

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