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Key Points
- Major tech sectors including semiconductors, software, AI, and space are benefiting from the investment boom, and ETFs offer one of the simplest ways to gain exposure.
- Leading tech ETFs have delivered annualized returns ranging from roughly 30% to more than 50% over the past three years.
- While investors should not expect those outsized returns to continue indefinitely, tech ETFs remain a compelling long-term way to invest in high-growth companies.
Major technology sectors – semiconductors, software, and artificial intelligence (“AI”) – are some of the stock market’s hottest investments right now. With major tech companies investing in AI at record levels, many related stocks have surged to all-time highs over the past year.
For investors looking to ride this investment wave, it can be challenging to pick individual tech stocks. An easier way to get diversified exposure to these companies and find winners is to invest in some of the best tech exchange-traded funds (“ETFs”), often for a low cost.
The best tech ETFs in chips, software, and AI have returned 30%, 40%, and even 50% annually over the past three years – without investors needing to analyze and trade stocks.
While tech darlings such as Nvidia (NVDA) and Broadcom (AVGO) have raced higher for years, the big winners aren’t all trillion-dollar mega-cap stocks. In fact, even smaller chip companies and lesser-known software and AI companies can offer huge returns in the investment boom.
So, the best tech ETFs offer an accessible way for investors of all skill levels to invest in a portfolio of winning stocks across the semiconductor, software, space, and AI sectors.
Top Tech ETFs to Invest in for 2026
| Fund (ticker) | One-year return | Three-year annualized return | Expense ratio |
| VanEck Semiconductor ETF (SMH) | 99.0% | 55.3% | 0.35% |
| Invesco PHLX Semiconductor ETF (SOXQ) | 116.7% | 49.0% | 0.19% |
| State Street SPDR S&P Kensho Final Frontiers ETF (ROKT) | 69.8% | 40.2% | 0.45% |
| Franklin Intelligent Machines ETF (IQM) | 37.1% | 32.0% | 0.50% |
| Procure Space ETF (UFO) | 54.3% | 35.2% | 0.75% |
| Invesco AI and Next Gen Software ETF (IGPT) | 83.6% | 39.3% | 0.56% |
| Amplify Bloomberg AI Equal Weight ETF (AIVC) | 99.5% | 44.0% | 0.59% |
How MarketWise Selected These Funds
MarketWise chose its best tech funds based on the following criteria:
- Funds with exposure to the semiconductor, software, AI industries, and others
- Funds with at least three years of strong returns
- A reasonable expense ratio
- No leveraged or inverse funds
1. VanEck Semiconductor ETF (SMH)
This fund tracks the MVIS U.S. Listed Semiconductor 25 Index, which includes 25 semiconductor production and equipment companies. This fund also makes our list of best semiconductor ETFs.
This VanEck fund is the market’s largest semiconductor-focused ETF, and it charges a fair 0.35% expense ratio. Its returns were notably strong over the past year and three years, and even its five-year returns bested the largest chip-focused funds, too.
Assets under management: $70.5 billion
Top holdings: Nvidia, Taiwan Semiconductor Manufacturing (TSM), Broadcom, Micron Technology (MU), Advanced Micro Devices (AMD)
2. Invesco PHLX Semiconductor ETF (SOXQ)
This passively managed Invesco fund tracks the PHLX Semiconductor Sector Index, which includes the 30 largest semiconductor companies listed on U.S. exchanges. The fund’s low expense ratio of 0.19% means that more money stays in your pocket rather than going to the fund manager.
This chip fund recorded the best one-year returns on our list as well as the second-best annualized returns here over the past three years. It’s a testament to the fact that you don’t need a high-cost fund to achieve attractive total returns.
Assets under management: $2.9 billion
Top holdings: Nvidia, Broadcom, Micron Technology, Applied Materials (AMAT), Marvell Technology (MRVL)
3. State Street SPDR S&P Kensho Final Frontiers ETF (ROKT)
This passive fund tracks the S&P Kensho Final Frontiers Index, which includes companies driving the exploration of space and the deep seas.
The fund has had a tremendous run over the past year and three years, and yet it still charges a not-too-costly expense ratio of 0.45%, putting it among the lower half of expense ratios on the list, despite those stellar returns. This State Street fund also ranks in our list of best space ETFs.
Assets under management: $209.2 million
Top holdings: Oceaneering International (OII), Ducommun (DCO), RTX (RTX), Forum Energy Technologies (FET), Heico (HEI)
4. Franklin Intelligent Machines ETF (IQM)
This Franklin actively managed fund invests in stocks that fit the theme of intelligent machines, where AI is driving the “transformation of products, software, systems and machinery as well as product design, manufacture, logistics, distribution and maintenance….,” according to the prospectus.
Despite being an actively managed fund, it doesn’t charge a steep expense ratio, at just 0.5%. And it has delivered some outstanding annual returns over the past year and three years.
Assets under management: $108.7 million
Top holdings: Nvidia, Taiwan Semiconductor Manufacturing, Celestica (CLS), Broadcom, SanDisk (SNDK)
5. Procure Space ETF (UFO)
This passively managed fund tracks the S-Network Space Index, which includes companies with a majority of their sales coming from space-related sectors, including satellite-based telecoms, space technology and hardware, as well as rocket and satellite manufacturing, among others. The fund’s above-average expense ratio of 0.75% has been worth the extra returns you’re getting, at least so far.
This fund’s portfolio is more tightly focused on telecom names such as Viasat and Sirius XM, as well as rocket companies such as SpaceX (SPCX) and Rocket Lab (RKLB). So, the fund may be a better pick for investors with that kind of investment angle on space.
Assets under management: $609.7 million
Top holdings: Viasat (VSAT), Sirius XM (SIRI), Trimble (TRMB), Garmin (GRMN), AST SpaceMobile (ASTS)
6. Invesco AI and Next Gen Software ETF (IGPT)
This passively managed Invesco ETF tracks the STOXX World AC NexGen Software Development Index, which includes “companies with significant exposure to technologies or products that contribute to future software development through direct revenue,” per the prospectus.
The fund’s one-year performance at more than 80% is nothing short of amazing, while its three-year annualized performance approaches 40% – all for a reasonable expense ratio.
Assets under management: $1.2 billion
Top holdings: Advanced Micro Devices, Alphabet (GOOGL), Nvidia, Meta Platforms (META), Micron Technology
7. Amplify Bloomberg AI Equal Weight ETF (AIVC)
This passively managed Amplify fund tracks the Bloomberg AI Value Chain Equal Weight Total Return Index, which includes cloud computing, semiconductor, and hardware companies that form the basis of AI technologies. The fund uses an equal-weight approach, where stocks have a broadly similar position size in the portfolio.
The fund’s price has effectively doubled over the past year, while its 44% annualized returns over the past three years would have generated some significant wealth. This fund’s returns have been among the best on this list of superstars, and it charges a not-too-high expense ratio.
Assets under management: $120.9 million
Top holdings: Alibaba (BABA), Atlassian (TEAM), Hewlett Packard Enterprise (HPE), Microsoft (MSFT), Snowflake (SNOW)
Are Tech Stocks a Good Long-Term Investment?
Tech stocks have long been among the market’s most popular investments. The best stocks offer scalability – that is, their profits can grow much faster than their sales. As they grow, their profits often soar as their operating margin improves.
Semiconductor stocks have performed very strongly in the past few years, as Big Tech companies, such as Microsoft and Alphabet, have poured money into AI investments. However, much of this high return has occurred in the past year, with two funds in the list up about 100% or more.
This level of performance will be hard-pressed to continue over time, even if semiconductors do post attractive long-term returns. It’s effectively impossible for a stock or fund to put up this level of return over extended periods. So, investors should expect returns to come back to more normal levels, say 20% annually over time. Even this more manageable level will build huge wealth over time.
For investors who like the prospects of the top tech stocks, it’s important to invest cautiously, especially after the phenomenal returns over the past year and three years. Take a long-term view on the market and invest regularly over time. Doing so helps reduce your risk of buying at a relatively high point, and it still can deliver attractive long-term returns.
Regards,
James Royal, PhD
Editor’s Note: One company quietly beat Apple, Amazon, and the S&P 500 — combined. Over the long run it has returned more than 8,300%… enough to turn $10,000 into $830,000. Yet most investors have never heard of it. Former fund manager Whitney Tilson says right now it’s trading at a rare discount — and he’s revealing the name and ticker, free of charge. Click here for the details…
