Technology Index fund

To:c.wilson,

The problem with new ETFs is we can't track their performance. TEC is also new, but it is investing in the biggest players in the industry, so its easier to understand performance. Likewise, if there is a lack of interest in these new ETFs, they could dissolve before they really get going.

The ones you mentioned are very niche products:

• CYBR: Cybersecurity
• HERO: Gaming
• CARS: Next gen automobile tech
• EDGE: A little broader - looks like innovation companies

Since they are all new, and have very low assets under management, they are likely to be more volatile. Likewise, since they are very industry specific they carry more risk.

TEC and XIT are much broader, and cover multiple sub-tech industries. Nothing wrong with testing the waters with those if you have a decent risk tolerance. For example, if you are keen on getting investing into green car tech, then CARS may be a good option. You get exposure to TESLA, several battery companies, leading 5G and chip companies.

Mat

Hi Daisy,

Yes, absolutely tech is a place you want to be. Tech is critical to a connected world. Interestingly, the TSX Technology Index has outperformed the TSX in a big way over this bear market as a shift to work from home has made it clear that tech is just as essential as buying groceries. Year to date, the TSX is down by approximately 16%, whereas the Tech index is up by 10%.

Bottom line, everyone should have exposure to technology.

Since Canada's tech industry is small (accounts for only 5%) of the TSX Index, an ETF that tracks the Tech industry is a good way of getting exposure to tech. The iShares S&P/TSX Capped Info Tech ETF (TSX:XIT) is a good one. It tracks the Index and the top positions include GIB.A, SHOP, CSU and OTEX which are the largest tech stocks in the country. Combined they account for more than 95% of the ETF.

It is a good way of getting exposure to some of the biggest and most successful tech stocks in the country. CSU is on our bull list, SHOP was, and we've been taking a hard look at OTEX and GIB.A recently.

Another interesting way to gain exposure is through TD Global Technology Leaders Index ETF (TSX:TEC). This ETF holds about 90% in U.S. equities and counts Microsoft, Apple and Amazon among the top holdings. It isn't a pureplay tech despite its title, but about 70% of holdings are dedicated to the sector and you are getting exposure to the world tech behemoths.

Really glad that you are finding value in the Premium site. Spread the word and if you have any suggestions for improvement please reach out. We are constantly making improvements and adding new features as we go.

Mat