Best Technology ETFs for Q4 2021
The technology sector includes companies focused on the research, development,and sale of a broad range of hardware and software used by consumers andbusinesses. It includes giants such as Apple Inc. (AAPL), Microsoft Corp.(MSFT), and Amazon.com Inc. (AMZN), as well as many fast-growing youngercompanies. The sector has been a major driver of overall gains in the stockmarket.
* The tech sector slightly underperformed the broader market over the past year. * The ETFs with the best 1-year trailing total return are BLOK, PSI, and PRNT. * The top holdings of these ETFs are class A shares of MicroStrategy Inc., Advanced Micro Devices Inc., and ExOne Co., respectively.There are 70 distinct technology ETFs that trade in the U.S., excludinginverse and leveraged ETFs, as well as funds with less than $50 million inassets under management (AUM). The technology sector, as measured by the S&P500 Information Technology Sector Index, has slightly underperformed thebroader market with a total return of 30.7% over the past 12 months comparedto the S&P 500’s total return of 31.1%, as of Aug. 30, 2021. The best-performing technology ETF, based on performance over the past year, is theAmplify Transformational Data Sharing ETF (BLOK). We examine the top 3 besttech ETFs below. All numbers below are as of Aug. 31, 2021. * Performance over 1-Year: 98.4% * Expense Ratio: 0.71% * Annual Dividend Yield: 1.33% * 3-Month Average Daily Volume: 353,368 * Assets Under Management: $1.2 billion * Inception Date: Jan. 17, 2018 * Issuer: Amplify InvestmentsBLOK is an actively managed ETF that invests at least 80% of its assets instocks of companies that are actively engaged in the development andutilization of blockchain technologies. Blockchain technology is a type ofdistributed ledger technology underpinning many cryptocurrencies. The vastmajority of the fund’s holdings are based in North America and over halfoperate within the software and services sector of the economy. It follows ablended strategy, investing in a mix of both growth and value stocks acrossthe market cap spectrum. The fund’s top three holdings include class A sharesof MicroStrategy Inc. (MSTR), a provider of enterprise software platforms; Hut8 Mining Corp. (HUT:TSE), a Canada-based bitcoin mining and blockchaininfrastructure company; and Marathon Digital Holdings Inc. (MARA), a digitalasset company which mines cryptocurrencies worldwide. * 1-Year Trailing Total Returns: 62.4% * Expense Ratio: 0.57% * Annual Dividend Yield: 0.14% * 3-Month Average Daily Volume: 37,302 * Assets Under Management: $773.2 million * Inception Date: June 23, 2005 * Issuing Company: InvescoPSI is a multi-cap fund that targets growth semiconductor stocks. The fundtracks the 30-stock Dynamic Semiconductors Intellidex Index. The multi-cap ETFnormally invests 90% of its total assets in stocks in the index. PSI focusesentirely on U.S. stocks. The ETF’s top holdings are Advanced Micro DevicesInc. (AMD), a multinational semiconductor manufacturer; Qualcomm Inc. (QCOM),a wireless services, semiconductor, and software company; and Broadcom Inc.(AVGO), a maker of semiconductor and infrastructure software products. * Performance over 1-Year: 59.0% * Expense Ratio: 0.66% * Annual Dividend Yield: N/A * 3-Month Average Daily Volume: 91,044 * Assets Under Management: $520.0 million * Inception Date: July 19, 2016 * Issuer: ARKPRNT follows the Total 3D-Printing Index, which targets companies in theburgeoning 3D printing industry in the U.S., non-U.S. developed markets, andTaiwan. Companies in the benchmark are involved in 3D printing hardware,computer aided design and 3D printing simulation software, 3D printingcenters, scanning and measurement, and 3D printing materials. The top holdingsof this fund include ExOne Co. (XONE), a provider of industrial 3D printingsystems and services; 3D Systems Corp. (DDD), a maker of 3D printers, 3Dprinting materials, and 3D scanners; and SLM Solutions Group AG (AM3D:ETR), aGerman maker of 3D metal printers.The comments, opinions and analyses expressed herein are for informationalpurposes only and should not be considered individual investment advice orrecommendations to invest in any security or to adopt any investment strategy.While we believe the information provided herein is reliable, we do notwarrant its accuracy or completeness. The views and strategies described onour content may not be suitable for all investors. Because market and economicconditions are subject to rapid change, all comments, opinions, and analysescontained within our content are rendered as of the date of the posting andmay change without notice. The material is not intended as a complete analysisof every material fact regarding any country, region, market, industry,investment, or strategy.The Next Big Thing In Indian Tech: B2B Startups Tapping The U.S. Market ToTurbocharge Growth(c) Harshmunjal | Dreamstime.comWhen you think of high-tech in India, you might recall the country’s giantoutsourcing firms (Tata, Wipro, Infosys)—they flourished in the 1990sproviding business-processing help to big Western brands. More recently,India’s exploding tech scene has spawned high-profile, consumer unicornsserving the country’s burgeoning middle class: E-commerce giant Flipkart (soldto Walmart), payments company Paytm and online education company BYJU’s, toname a few. All racked up significant, unicorn-level investment from globalventure capitalists.But today, a third generation of Indian technology innovation is catching theeye of investors—and has the potential to create a new crop of Indian B2B,cloud-software behemoths that could rival large enterprise companies in theU.S., if they can tap the right markets for growth.Why now?In short, the recent growth of large technology businesses in India—most ofthem consumer-focused—has created a pool of ultra-talented software developerscreating innovative new technologies that are spawning new communities andspinning out into new enterprises. Just as Yahoo’s internally developed, open-source Hadoop data technology (later refined by the Apache SoftwareFoundation) spun out in the U.S. to underpin companies like Cloudera andHortonworks, and Google’s Kubernetes became a key, underlying software-development technology for many larger companies, India’s biggest techcompanies are also innovating internally, often with low-cost or free open-source software. The country’s most talented engineers are flocking to thesecommunities and companies today, instead of setting their signs on jobs at bigBPO/outsourcing firms or moving to the U.S. (thanks, Donald Trump).Right now, there are at least five million software developers in India,compared to more than four million in the U.S. India also ranks third in theworld—after the U.S. and China— as far as contributions to GitHub, the widelyused software-development platform. The highly skilled Indian engineerscontributing to GitHub also generally have a strong value mentality andpropensity to use free, open-source software instead of pricier commercialtechnology when there’s a choice.And that essentially creates a perfect storm of innovation that, we believe,will lead to the creation of more world-class, cloud and open-source softwarecompanies in India.Early enterprise successesSome of these companies have already hit the global stage. BrowserStack,founded in Mumbai in 2011, has developed a world-class, cloud platform thathelps developers automate testing tasks. It now has additional offices in SanFrancisco and Dublin and counts more than 25,000 paid customers, includingmajor brands such as Microsoft, ESPN, Mastercard and General Mills, accordingto the company.Similarly, business cloud-software provider Freshworks was founded in Chennai,India around that same time by entrepreneurs Girish Mathrubootham and ShanKrishnasamy. Both previously worked at Zoho, an earlier-generation Indiansoftware company that makes business tools and related IT-management software.Freshworks’ first customer, however, was a college in Australia, which signedup for the service online. Fellow tech upstart Postman, which makes a platformhelping developers create critical APIs, was founded by Indian entrepreneursand just raised $150 million in funding this past June.Other companies like Hasura, an open-source startup making API tools fordevelopers, are also gaining notice: Hasura’s two founders had previouslystarted in the consumer-tech world, building an online food-delivery platformin India. More companies in India, driven by raw entrepreneurial talent andgrowing corporate-tech spending in India, will surely follow the same path.After all, India’s GDP of around $3.2 trillion and IT spending at $94 billionvalidate that there is a real product-market fit with Indian enterprisestartups now and an opportunity for them to build decent-sized businesses.Hopping the (other) pondBut will serving the Indian end market ultimately be enough? We think probablynot—and that many of India’s most-innovative enterprise startups will need tofollow the lead of companies like BrowserStack, Freshworks and others bytapping new customers around the world and, most of all, in the large U.S.market to realize their full growth potential.Two years ago in this column, we offered similar advice to European B2Bstartups, which also emerged as a second wave there after the earlier successof European consumer-tech giants like Skype, Spotify and Supercell. EarlyEuropean B2B tech companies like MySQL and Zendesk wound up moving theirheadquarters to the U.S. to capture larger enterprise customers—and othercompanies followed suit. Similarly, a significant number of the B2B, venture-funded companies in our portfolio that were founded in Europe have since movedheadquarters or significant chunks of their go-to-market operations to theU.S.—“hopped the pond”, as we put it—in the last six years. These includeCollibra*, Dataiku*, Mendix*, Quinyx*, Guardsquare*, Matillion* and Mews*.Through the years, we’ve also helped many companies in Israel expand into theU.S. to tap the market here.Both European, Israeli and Indian B2B companies will find a larger pool of ITspending available in the U.S. – nearly $1 trillion projected by 2022, morethan 10 times the size of the Indian market and the largest in the world.European companies also often find it easier to sell to one large, commonmarket, as opposed to the more fractured landscape of Europe, with itsdifferent languages and country-by-country regulations.For Indian companies, just the difference in overall market size is huge:Total IT spending worldwide is approximately 37 times larger than India’s,despite India accounting for 17% of the worldwide population. U.S. customersare also often more willing to pay higher prices for quality, commercialsoftware, as opposed to Indian corporates who are often more value-orientedand inclined to try to make technology in-house.Finally, Indian B2B companies may have an advantage selling in the U.S. thesedays because of our country’s ongoing trade and political tensions with China.Simply put, U.S. corporates may be more willing to buy from an Indian vendorthan a Chinese company to avoid the political and regulatory hassle. Just lookat what’s happening with Huawei and TikTok. Not to mention that immigrationlaws may make it difficult for Indian entrepreneurs to relocate and work inU.S., so innovation may prosper locally in India and find its way to the U.S.enterprise buyer that way.We view the growth potential for homegrown, Indian DevOps, data, AI and othercloud-based technology as nascent but huge. There are, of course, manychallenges companies face when moving to the U.S. to tap the enormous market.These include deciding where to create a U.S. headquarters (usually on theWest or East coasts); establishing go-to-market operations; hiring effective,U.S.-based leaders across sales, marketing and customer success; andnavigating the complex enterprise-sales process within extremely largeorganizations. (We have written more generally about these topics in ourCloud-Native Entrepreneur’s Playbook, here, here and here.) Partnering with alarge, global and experienced investor can often help with many of theseissues, in addition to providing capital for growth. These firms can usuallyalso offer companies value-added services in areas like business development,recruiting and corporate communications.There is a massive opportunity ahead, and we hope to lend a helping hand tofounders seeking to capitalize on this third wave of Indian tech innovation.Top 10 IT Companies in IndiaTop software companies play an important part in the Indian IT sector industryand worldwide in the expansion of technology space. Although Indian software engineers may have reliability and low hourly rates,we can’t deny the quantity of sheer tech talent throughout the country. In recent years, however, many global tech giants like HP, Dell, TCS, Infosys,Viacom, and Oracle in India have helped to develop “tech cities” likeBanglore, Pune, Hyderabad, and Delhi’s Gurugram as global tech hubs. India is one of the top software IT outsourcing destinations serving not onlylocal customers but also internationally. Impacts of Information Technology on Indian economy: Information Technologycontributes 7.5% to India’s GDP. Revenues of $147 billion with exports of $99 billion and domestic of $48billion in 2014-2015. IT employs over 2.8 million people directly, while over 9 million indirectly. Based on market cap here are the top IT companies in India:
10. Hexaware – $1.43 billion/₹ 10,219 crores
Hexaware Technologies is a service provider company located in Navi Mumbai,India. The brand is repeatedly listed among the best Indian information technologycompanies for various business outsourcing solutions. Established in 1990, the Company provides custom software development servicesfor banking systems (tax, audit, accounting, law, travel), travel and logisticservices, financial services, capital markets, and healthcare, insurancecompanies, manufacturing, retail, education, and services, telecommunications. It specializes in a range of applications, enterprise solutions, businessintelligence & analytics, digital assurance, infrastructure managementservices, and various business process services. In 2014, the board appointed R Srikrishna as the CEO of Hexaware Technologies. This company is headquartered in Mumbai and has branches in North America,Mexico, the UK, Singapore, Japan, India, China, UAE, France, Germany, Romania,and the Netherlands in Europe. HT Global IT Solutions Holdings Limited is the primary owner of this IT brand.
9. Mindtree – $1.62 billion/₹ 11,602 crores
Mindtree Limited is a top software Indian multinational company based inBanglore, India, and New Jersey, USA which provides IT solutions andoutsourcing. Larsen & Toubro group is the biggest shareholder of this organization. The company operates with over 339 active customers, and 43 offices in over 18countries, as of 31 March 2019, in the sectors of e-commerce, mobileapplications, cloud computing, digital transformation, data analytics,enterprise application integration, and ERP. Mindtree provides its customers with digital transformation and technologicalsolutions. Their services are industry-specific to customers, and thus it plays a crucialrole in speeding up their customer (client’s) growth. The core values of the organization are the collaborative spirit, professionalthinking, and continuous dedication. With nearly 30% inclusion of women in their workplace, the corporationpromoted gender diversity. The business still takes part in the community and social works. The Mindtree Foundation works to improve conditions of life and better primaryeducation for people with disabilities. It is also connected to several NGOs around the world. The customer baseincludes major technology companies such as Microsoft Oracle, IBM, and HP. The company is one of the leading IT companies in India thanks to itsexpertise. They give end-to-end solutions in analytics, social media intelligence, etc.
8. Mphasis – $2.38 billion/₹ 16,995 crores
Mphasis is a Bangalore-based popular IT company in India The company provides outsourcing services for infrastructure technology,applications, and architectural supervision, application development andintegration, and app management services. Financial services, telecommunications logistics, and engineering industriesare some major sectors it serves. The company was awarded not only on the level of the business sector but alsoby management for its contribution to the industry. Mphasis has selected some vertical segments where it has high-end bankingexpertise. From 2012, they mainly focused on sales, marketing, and the development oflong-term relationships with their business partners.
7. Oracle Fin. Serv. – $3.77 billion/₹ 26,955 crores
Oracle Financial Services, before known as i-Flex Solutions, is Oracle’s ITequivalent to the banking sector. It is an important part of the global business unit of Oracle FinancialServices. They offer cloud solutions to financial services such as the Engaged Bank, APIEconomy, and Digital Innovation Platform. The firm operates on sectors of industries such as finance, insurance, andcapital markets. Financial Services Next.0 is their leading product and helps customers withtheir business models in implementing IT platforms. There are many tools used for determining the adequacy of capital assets,compliance with commodity trading, management systems for businessperformance, etc. Over the years, Oracle Financial Services has been one of India’s largest ITfirms. The company’s website was merged into Oracle as part of its 2008 rebrand, anddivisions and services aligned on Oracle Corporation.
6. L&T Infotech – $4.01 billion/₹ 29,049 crores
One of the top IT companies in India providing global IT solutions andservices, Larsen & Toubro Infotech Limited (LTI) is headquartered in Mumbai,India. Since its inception, away from its core engineering sector, Larsen & Toubroset an ideal example of good corporate leadership. The organization was, however, faced with a revolt in 2016 as a complaintagainst them for the revoking, in a waiting period of 18 months, of the offerletter of around 1500 recruits. AugmentIQ Data Sciences Pvt Ltd was recently acquired by LTI in October 2016to increase the ability for big data, analytics, and Internet servicestechnologies (IoT). Sanjay Jalona is the present MD and CEO of this big Indian tech giant.
5. Tech Mahindra – $10.62 billion/₹ 75,803 crores
Tech Mahindra Limited (a subsidiary of Mahindra Group) is an Indianmultinational corporation offering IT solutions to businesses in a variety ofvertical and horizontal sectors, and the outsourcing of business processes(BPO). Anand Mahindra is the chairman of the corporation, which has headquarters inPune and a registered office in Mumbai. Tech Mahindra is also CMMi Level 5 Company. In the Indian IT industry andthroughout the world, Forbes ranked the company as one of the top companies inFortune India 500. Through customer-centric and technical experience, the business Tech Mahindraallows consumers around the world to turn their businesses in an automateddirection. Following the 2008-09 Satyam scandal, Tech Mahindra submitted a bid to buySatyam Computer Services and came to the offer with an Rs. 58.90 per share,which resulted in it buying 31 percent stake making a new brand MahindraSatyam, that also beat a strong competitor, Larsen & Toubro. Following boards of two companies allowing the formation of a $2.5 billion ITcompany which today it is, Tech Mahindra announced its merger with MahindraSatyam, on 21 March 2012.
4. Wipro – $20.67 billion/₹ 1,47,621 crores
WIPRO is a global Indian company providing IT, consulting, and businessprocess services (BPO). Headquarters are located in India’s silicon valley, Bangalore, where many topIT companies in India are located. Wipro offers diverse services to its client base combined with its businessexpertise to assist customers in strategically deploying and using technologyto meet their business targets. An ISO 14001 certification was first issued to this Indian technology andservice firm in 2002. The company has several key areas of focus such as machine learning, datascience, and analytics. Wipro is currently heavily investing in its new blockchain technology.
3. HCL Tech – $21.68 billion/₹ 1,54,861 crores
HCL Technologies Limited is an Indian multinational IT consulting firm basedin Noida, Uttar Pradesh. Being an HCL Enterprise’s subsidiary with a worldwide network of R&Ds,“innovative labs,” and “customer service centers,” including over 137,000employees, and 250 customers is listed among the Fortune 500 as well as 650among global 2000 companies. It has its office in 42 countries, including in the United Kingdom, the UnitedStates, France, and Germany. HCL operates in aerospace and defense, automobile, banking, capital markets,chemical and service industries, power and services, education, high tech,industrial manufacturing, consumer goods, insurance, life sciences,agriculture, mining and natural resources, oil and gas, transportation,telecom, logistics, and hospitality. It is engaged in the most important sectors. The company has a culture ofrelationships with its customers beyond the contract. This corporation did business with banks such as Deutsche Bank, tech companiessuch as HP, and many more global companies. HCL has an excellent reputation for being able to provide its consumers withhigh value and trust. Recently, the company gained ETL Factory Limited, based in Britain, to improveits automation expertise. Power of One, the community-driven employee initiative of HCL, is aimed atleading social projects and activities in transformation.
2. Infosys – $43.03 billion/₹ 3,07,393 crores
Infosys, with an initial capital of $250, was founded in 1981 by sevenengineers in Pune, Maharashtra, India. The company has 50 offices all over the world and many delivery centersworldwide. Infosys was the first Indian IT company on the NASDAQ list and grew strongerday by day. Infosys has always ranked among the top 10 IT sector companies in India andhas been a consistent performer in the field. The company invests heavily in its NextGen technology solution’s research anddevelopment. Finacle has gathered a lot of momentum from Infosys, the main banking servicethat was later merged into EdgeVerve Systems Ltd.
1. TCS – $114.7 billion/₹ 8,19,352 crores
The Indian multinational IT service and consultancy giant Tata ConsultancyServices Limited (TCS) has its headquarters in Mumbai, Maharashtra, India. TCS is not only the no. 1 IT company in India but also top IT companies in theworld. It operates in 149 cities, in 46 countries and as a subsidiary of the TataGroup. TCS is by market capitalization and is also the biggest company in India. Established in 1968, and owned entirely by the Tata Group, became the largestinformation technology behemoth in India, JRD Tata became its first chairmanafter the inception. For Tata Sons, TCS generates about 70% of its revenues and is one of the worldleaders in the industry. It was one of the world’s leading innovative companies, according to Forbes. Forbes Asia ranked it on the 10th position among Forbes India 500 companies. TCS is also carrying out several collaborative R&D projects, the latest beingthe creation of a smartwatch through a partnership with SATS. TCS also has the highest number of employees in the country with a nearly400,000 workforce. Over the last decade, the company has continuously been the biggest ITrecruiter in India. It has founded the largest business learning center in Trivandrum, Kerala,which can educate up to 50,000 graduates per year. TCS and its 67 subsidiaries provide both government bodies and privateenterprises with a wide range of technology-related products and services. In 46 countries, it has 289 offices and 147 delivery centers in 21 countries. Besides, it has 19 research centers and collaborations in three countries withleading Institutes such as IITs, Stanford, MIT, CMU.Indian Technology businesses have been driven by growth, jobs created,increased access to resources, education and health care, and reduced povertyand improved lifestyles. A NASSCOM report indicated that India was the third biggest start-up ecosystemin the region with more than 100 accelerators, 200 active angels, 150 VCs, andmore than 4,200 start-ups. Innovation, technology, and enterprise is the forefront of this developingtechnologically advanced nation.