Market

AI Ranks The VanEck Vectors Semiconductor ETF The Best Among This Month’s Top US Tech Smart Beta ETFs

Tech stocks have had an up and down ride ever since Pfizer
PFE
announced the efficacy of its vaccine back in November. Coupled with inflation fears, rising bond yields, and potential tax hikes, the outlook for tech is cloudy. Not to mention, we have a global chip shortage that could prove to be a significant challenge for high-growth stocks to meet lofty production goals. The market is constantly evolving and rotating. For now, tech is not the flavor of the year as it was back in 2020. Value stocks and reopening plays are getting all the glory. Be that as it may, the Nasdaq is still not too far off record levels. Plus, after seeing its worst sell-off since March on the second day of May, tech shares are leading the market higher. While there are unanswered questions for tech stocks, and the sentiment is mixed, there is still a lot to like about specific tech sectors. Q.ai’s deep learning algorithms have identified several of the top US Tech Smart Beta ETFs based on fund flows over the last 90-days, 30-days, and 7-days. We’ve rated one ETF as Best, three as Good, four as Caution, and two as Poor.  

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Best

VanEck Vectors Semiconductor ETF (SMH)

The first ETF scored Best for the month according to our AI systems is the VanEck Vectors Semiconductor ETF
SMH
. This ETF aims to follow and track the overall performance of companies involved in semiconductor production and equipment. This ETF is unique compared to other semiconductor focused ETFs, because their holdings are not limited to exclusively US companies. Based on AUM, it is on the smaller side with $2,651,897,922.14 AUM. It has seen mixed fund flows of $795,980,015.00 over the last 90-days, -$13,850,645.50 over the last 30-days, and $171,453,649.50 over the last week. Its net expense ratio of .35% is relatively middle of the pack compared to other tech ETFs, but pricier than ETFs in different sectors. 

Good

iShares PHLX Semiconductor ETF (SOXX)

The first Good-rated ETF for this month is the iShares PHLX Semiconductor ETF
SOXX
 
. This ETF aims to follow and track the overall performance of US based companies involved in semiconductor production and equipment. With a worldwide semiconductor shortage, this is definitely the type of ETF you want to keep your eyes on. The ETF is also on the smaller side with $3,658,452,370.65 AUM. The ETF has also seen mixed fund flows, with a 90-day fund flow of $979,533,715.00, 30-day fund flow of $276,599,140.00, and 1-week fund flow of -$150,664,075.00. The iShares PHLX Semiconductor ETF also has a net expense ratio of .48% which is certainly on the pricier side.

Invesco NASDAQ Internet ETF (PNQI)

The Invesco NASDAQ Internet ETF
PNQI
 
is our next Good-rated ETF this month. This ETF is designed to track the performance of companies engaged in Internet-related businesses listed on multiple U.S. exchanges. This ETF specifically focuses on companies engaged in Internet-related services including, but not limited to, Internet software, Internet search engines, web hosting, website design or eCommerce. The ETF is also on the smaller side with $865,139,978.71 AUM. The ETF has also seen mixed fund flows, with a 90-day fund flow of -$2,191,764.20, 30-day fund flow of $2,486,475.40, and 1-week fund flow of $2,486,475.40. The ETF also has a net expense ratio of .6% which is quite pricey. 

Direxion Daily Semiconductors Bull 3x Shares (SOXL)

The Direxion Daily Semiconductors Bull 3x Shares
SOXL
 
is our final Good-rated ETF. This is a leveraged ETF with exposure to the semiconductor space. The ETF aims to receive 300% or 3X the performance of the PHLX Semiconductor Sector Index. In terms of AUM, the ETF is on the smaller-side with $1,431,060,585.88 AUM. The ETF has also seen consistent fund flow, with a 90-day fund flow of $56,455,726,917.24, 30-day fund flow of $7,405,250.00, and 1-week fund flow of $88,624,350.00. The ETF also has a net expense ratio of 1.02% which is the pricest on this list. 

Caution

iShares US Technology ETF (IYW)

The iShares US Technology ETF
IYW
is our first ETF rated Caution this month. This ETF aims to give investors exposure to an index of US based tech stocks focused on electronics, computer software and hardware, and informational technology. Not surprisingly, its Top 5 holdings are Apple
AAPL
, Microsoft
MSFT
, Facebook, Nvidia
NVDA
, and Alphabet. The fund is on the smaller side and reports $6,211,305,815.55 AUM. The ETF has also seen consistently negative fund flows, with a 90-day fund flow of -$116,188,220.00, 30-day fund flow of -$23,539,265.00, and 1-week fund flow of -$94,076,940.00. Its net expense ratio of 0.44% is also fairly expensive.

Invesco QQQ Trust (QQQ)

The Invesco QQQ Trust
QQQ
 
comes in as our second Caution-scored ETF for the month. This ETF is considered to be the benchmark ETF that tracks the NASDAQ index. With $135,325,863,242.82 AUM, it is by far the largest tech ETF in terms of AUM on our list. It has seen mixed fund flows, with a 90-day fund flow of $1,565,231,180.50, 30-day fund flow of -$1,663,460,523.50, and 1-week fund flow of $501,416,626.00. It also has a fairly cheap net expense ratio of .2% compared to other tech ETFs. 

Vanguard Information Technology ETF (VGT)

The Vanguard Information Technology ETF
VGT
is our third ETF rated Caution this month. This ETF is passively managed, and focuses specifically on companies that engage in information technology. Its 5 largest holdings are fairly standard- Apple, Microsoft, Visa
V
. Nvidia, and Mastercard
MA
. The ETF is mid-sized with $37,076,508,980.04 AUM. It has seen consistently positive fund flows, with a 90-day fund flow of $437,984,961.96, a 30-day fund flow of $384,279,186.99, and a 1-week fund flow of $191,761,746.19. It also has one of the most reasonable net expense ratios on this list at .1%. 

Technology Select Sector SPDR Fund (XLK)

The fourth and final Caution-rated ETF is the Technology Select Sector SPDR Fund
XLK
. This ETF seeks to track the performance of the technology and telecom sector of the S&P 500. It has $35,474,828,187.21 AUM and is medium-sized. It has also seen mixed but mostly negative fund flows, with a 90-day fund flow of -$324,479,727.65, a 30-day fund flow of -$115,195,079.60, and a 1-week fund flow of $128,130,418.15. Its net expense ratio of .13% is also considerably cheaper than other tech ETFs. 

Poor

Fidelity MSCI Information Technology Index ETF (FTEC)

The first Poor-rated ETF is the Fidelity MSCI Information Technology Index ETF
FTEC
. This ETF seeks to track the performance of the MSCI USA IMI Information Technology Index which roughly represents the performance of the entire tech sector in the US equity market. It is on the smaller side with $4,627,495,484.17 AUM. The ETF has seen mixed fund flows, with a 90-day fund flow of -$26,573,485.25, a 30-day fund flow of $39,751,545.65, and a 1-week fund flow of $28,322,579.20. With a net expense ratio of 0.084%, this is also the cheapest ETF on the list.   

iShares North American Tech-Software ETF (IGV)

The iShares North American Tech-Software ETF
IGV
, also referred to as the iShares Expanded Tech-Software Sector ETF, is the final Poor-rated ETF this month. This ETF seeks to track the investment results of an index composed of North American equities in the software industry and select North American equities from interactive home entertainment and interactive media and services industries. It is on the smaller side with $4,985,313,905.00 AUM. The ETF has seen exclusively negative fund flows, with a 90-day fund flow of -$600,948,945.00, a 30-day fund flow of -$123,100,605.00, and a 1-week fund flow of -$883,615.00. With a net expense ratio of 0.48%, it is on the pricier side. 

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