They have all outperformed the benchmarks with a steady hand at the wheel to navigate volatile markets.
Technology stocks have rebounded in the past month, and some analysts believe they will finish the year strong. But if there is one thing we have all learned in recent months it is that things are highly uncertain.
Investors looking to tap into the best performing tech stocks in a volatile and uncertain environment may be well served by investing in actively managed technology ETFs. Actively managed ETFs mean they are managed by a team of portfolio managers, with stocks picked based on their insights and expertise.
The alternative is relying on passive ETFs that track an index, which are great during bull markets. However, they will struggle when the market is down. For example, the popular tech sector ETF, the Invesco QQQ, is up about 3% this year, tracking the Nasdaq 100. These 3 actively managed ETFs beat it by a significant margin.
1. Amplify Transformational Data Sharing ETF
The Amplify Transformational Data Sharing ETF (NYSEARCA), managed by Amplify Investments, has been a stellar performer this year, up about 23% year-to-date. This ETF is primarily invested in companies that are involved in the development and utilization of blockchain technologies. What is blockchain? It facilitates the process of recording transactions and tracking assets across a network, with the blocks in a chain storing the transaction data.
With the resurgence of cryptocurrency in recent months, this ETF has soared. This ETF invests in a portfolio of about 52 stocks and ETFs, with Metaplanet (MTPLF), an over-the-counter stock that doesn’t trade on a major index, the largest holding at 6.4%. The second largest holding is Robinhood (NASDAQ:HOOD) at 5.3%, followed by Galaxy Digital (NASDAQ:GLXY) at 4.3%. Coinbase Global (NASDAQ:COIN) and Core Scientific (NASDAQ:CORZ), both at 4.2%, round out the top 5.
Roughly 27% of the ETF is in platform stocks, which provide digital platforms for payments, transactions, or funding of accounts, while 17% are in crypto mining stocks, and 16% are in spot Bitcoin ETFs or companies that have the largest bitcoin reserves.
This ETF is up 23% YTD and has a one-year annualized return of 61%. Over the past three- and five-year periods it has annualized returns of 36% and 26%, respectively.
2. ARK Next Generation Internet ETF
The ARK Next Generation Internet ETF (CBOE:ARKW), managed by ARK Invest, has returned about 20% YTD. This ETF invests in companies that develop, produce or enable intelligent devices, next gen cloud, neural networks, digital wallets, autonomous mobility, cryptocurrencies, and smart contracts.
The fund holds about 41 stocks and ETFs, with the largest holding being ARKʻs own ARK Bitcoin ETF Holdco, which is part of ARKW. This ETF-within-an-ETF offers indirect exposure to Bitcoin and makes up 8.3% of the fund. The second largest holdings are Coinbase Global and Tesla (NASDAQ:TSLA) at 7.1%, followed by Robinhood at 7% and Roblox (NASDAQ:RBLX) at 6%.
This ETF is up 20% YTD and has a one-year return of 71%. Over the past three- and five-year periods it has annualized returns of 30% and 12%, respectively.
The iShares FinTech Active ETF (NYSEARCA:BPAY), managed by BlackRock’s iShares, has returned about 13% so far this year. As the name suggests, this ETF invests in financial technology, or fintech, companies that deliver innovative and emerging technologies in payments, banking, investments, insurance and software.
This fund holds about 39 stocks with eToro (NASDAQ:ETOR) and Circle Internet Group (NYSE:CRCL) representing the largest positions at 4.8% each. Block (NYSE:XYZ) and Robinhood are next at 4.6%, followed by Charles Schwab (NASDAQ:SCHW) at 4.5%.
This ETF is up 13% YTD and has a one-year return of about 27%. It was launched in August 2022, so it does not have a three-year track record yet.
Keep in mind, these are all niche technology sector ETFs, so they may be more volatile than most. But because they are actively managed, you have a team of professionals that can alter the portfolio based on trends and potentially navigate the rough spots better than passively managed ETFs.
