Though the stock market stumbled in 2022, it got off to a great start this year as many investors began to move out of defensive risk-off stocks and back into risk-on investments like tech stocks and digital assets.
Past performance is never a guarantee of future returns, and lots of research shows that it’s incredibly difficult to time the market by picking short-term winners. However, if you’ve got some free cash and have the risk tolerance for more aggressive swing trades that could pay off in weeks or months instead of many years, the following exchange-traded funds, or ETFs, are tactical ways to invest in what’s working on Wall Street right now.
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As you’ll see, the one thing that seems to be working in a big way is technology. But these seven top ETFs all offer different slices of that sector to gain exposure based on your personal investing strategy:
| ETF Sector | ETF |
| Best Crypto ETF | ProShares Bitcoin Strategy ETF (ticker: BITO) |
| Best FANG ETF | MicroSectors FANG+ ETN (FNGS) |
| Best Internet ETF | ARK Next Generation Internet ETF (ARKW) |
| Best Fintech ETF | Ark Fintech Innovation ETF (ARKF) |
| Best Semiconductor ETF | iShares Semiconductor ETF (SOXX) |
| Best AI ETF | Global X Robotics & Artificial Intelligence ETF (BOTZ) |
| Best Overall Tech ETF | iShares U.S. Technology ETF (IYW) |
Best Crypto ETF: ProShares Bitcoin Strategy ETF (BITO)
Bitcoin (BTC) started the year strongly and only gathered momentum over the month of March to become one of the best-performing investments of the first quarter with 70% gains year to date. A host of crypto-related investments have surged alongside bitcoin, but it’s important to understand that many digital assets are not as proven as bitcoin. Believe it or not, bitcoin has been around since 2009 and is perhaps the best-known and most respected option.
The ProShares Bitcoin Strategy ETF is one of the best-established funds in the space, with about $1 billion in assets. BITO can be bought and sold through a brokerage account, eliminating the need for a cryptocurrency exchange account or wallet, and it is tied to regulated bitcoin futures that trade here in the U.S. instead of overseas. It’s not quite up as much as bitcoin itself, but with more than 65% gains year to date, it’s pretty darn close.
Best FANG ETF: MicroSectors FANG+ ETN (FNGS)
If you recall the go-go days of tech several years back, you’ll remember the popular FANG acronym that stood for Facebook, Amazon.com Inc. (AMZN), Netflix Inc. (NFLX) and Google. The marketplace has evolved — including Facebook changing its name to Meta Platforms Inc. (META) and Google changing its name to Alphabet Inc. (GOOG, GOOGL) — but this acronym is still shorthand for the biggest and most dynamic names in tech.
This MicroSectors ETF is a play on that strategy, with a focused list of just 10 total Big Tech holdings at roughly 10% allocations to each name. It’s not a long list, but it’s a who’s who of megacap tech companies that are dominating right now. And based on FNGS performance of 40% gains since Jan. 1, this is a strategy that seems to be working in 2023.
Best Internet ETF: ARK Next Generation Internet ETF (ARKW)
If you aren’t quite convinced by the buzz around Web3 and blockchain, this ARK Next Gen Internet fund is a good option. The $1.3 billion fund ARK Next Generation Internet ETF is one of the top-performing funds this year, up about 40% since Jan. 1, with a focus on mobile payments company Block Inc. (SQ), streaming media icon Roku Inc. (ROKU) and videoconferencing giant Zoom Video Communications Inc. (ZM), among others.
Crypto exchange Coinbase Global Inc. (COIN) is also in there, but this is clearly much more than a crypto play given the diversity of internet-related businesses in the portfolio.
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Best Fintech ETF: Ark Fintech Innovation ETF (ARKF)
Another Ark ETF, this fund gives investors exposure to firms in mobile payments as well as digital wallets and blockchain technology. Some of these picks are in the prior fund because of their digital footprint, but there is a general focus on financial technology here instead of other tools and services.
The $800 million fund holds about 30 fintech companies, both foreign and domestic, that provide products or services that may change the financial technology landscape. That includes payments companies, yes, but also Canadian e-commerce giant Shopify Inc. (SHOP) or mobile-friendly brokerage platform Robinhood Markets Inc. (HOOD).
Best Semiconductor ETF: iShares Semiconductor ETF (SOXX)
The entire semiconductor manufacturing sector was in a slump during 2022 thanks to fears of a global slowdown that would weigh on demand, along with the lingering impact of supply chain disruptions of the past few years. But semiconductors are back in favor in part because of a rosier economic outlook for Europe and Asia — not to mention the recent United States Chips and Science Act that aims to inject $280 billion into the industry.
The nearly $7 billion iShares Semiconductor ETF is a tactical play on U.S.-listed chipmaking stocks, and things are definitely looking up. The fund is up almost 30% on the year thanks to strong performance from companies such as Nvidia Corp. (NVDA), Broadcom Inc. (AVGO) and Texas Instruments Inc. (TXN), among others.
Best AI ETF: Global X Robotics & Artificial Intelligence ETF (BOTZ)
If you’re looking to play the potential of artificial intelligence, the $1.7 billion BOTZ ETF may be the most mainstream play available. It may not have some of the more aggressive small-cap AI and big data firms out there, but many of these development-stage companies are little better than lottery tickets given that they are long on dreams but very short on actual profits.
Instead, BOTZ is populated with stocks like robotic surgery leader Intuitive Surgical Inc. (ISRG), sensor and bar-coding leader Keyence Corp. (KYCCF) and global electronics conglomerate ABB Ltd. (ABB). Not the sexiest names, true, but leaders in their field — and companies with deep pockets to fund AI and robotics development without going bankrupt as the field emerges. And given the 25% run for this ETF in 2023, there’s clearly something to be said for these more established AI plays right now.
Best Overall Tech ETF: iShares U.S. Technology ETF (IYW)
Not sure which corner of tech is going to succeed in 2023? Well never fear, there are also diversified sector funds that allow you to cast a much wider net. IYW is one of the leaders, with almost $11 billion in assets under management and about 140 total stocks that include the biggest names in Big Tech. It’s not particularly clever, but with about 25% gains so far in 2023 this iShares fund proves you don’t have to get cute and pick a highly specialized corner of Silicon Valley to get ahead.
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7 Best ETFs to Buy Now originally appeared on usnews.com
Update 04/04/23: This story was previously published at an earlier date and has been updated with new information.
