Experts Top 5 Tech ETF Alternatives to the QQQ

Technology stocks have had a tough run lately giving way to some serious declines.

That sent the Nasdaq 100 almost 10% at its worst.

Yet, other tech ETFs are fairing much better.

We wanted to look at some alternative tech ETFs to see how else we could invest in this key economic sector.

Turning to our TrackStar data, we pulled out the top searches by financial pros over the last month.

And at the top of that list was the iShares Expanded Tech-Software Sector ETF (IGV).

Key Facts About IGV

• Net assets: $6.69 billion
• 12-month trailing yield: N/A
• Inception: July 10, 2001
• Expense ratio: 0.41%
• Number of holdings: 115

Over the last decade, software startups have been a dime a dozen. You couldn’t walk five feet in Silicon Valley without tripping over one.

The appeal is obvious – scalability.

For an upfront investment of time and resources you can become a billionaire. Look at the founders of Stripe.

The iShares Expanded Tech-Software ETF invests in U.S. software companies. This includes interactive home entertainment to services industries.

Many of the top names you’ll be familiar with. But once you get past them, you’ll find fewer you may recognize.

Source: iShares

Software isn’t a monolithic industry.

As such, the fund breaks down into the various subcategories listed below.

Source: iShares

Performance

Software stocks have done remarkably well.

However, this ETF’s performance lags the QQQ by an average of 8% annually.

Source: iShares

A big reason for that – those pesky non-software companies like Nvidia and Tesla.

Competition

If you’re looking for other ways to invest in the tech sector, here are some interesting alternatives from our pros top searches.

• First Trust ISE Cloud Computing Index Fund (SKYY): Invests in companies involved in cloud computing and weights holdings by a modified equal-weight methodology
• First Trust NASDAQ Technology Dividend Index Fund (TDIV): Holds tech companies with dividends and uses a modified market-capitalization weighting.
• First Trust NASDAQ CEA Cybersecurity ETF (CIBR): A cybersecurity ETF that uses a modified market cap weighting.
• ETFMG Prime Cyber Security ETF (HACK): Same concept as CIBR, except HACK uses an equal weighting methodology.

What’s fascinating is that the tech dividend fund showed the best performance. Yet, its 5-year returns are trounced by the Nasdaq 100’s 143% gains over the same period.

Our Opinion 10/10 

While the IGV’s performance isn’t nearly as high as other tech ETFs, it does exactly what it claims at a reasonable cost.

You get a diverse 115-stock market-cap-weighted holding focused only on U.S. companies. And unlike the other ETFs on this list, the IGV has ample liquidity.