Global Tech ETF, or alternatives?

[Brabant]

I'm trying to find a Global Tech Index ETF, but they seem to be thin on the ground. iShares has one in the states (IXN) but doesn't seem to be available on any of the platforms I have access to (ii / HL). IT's such as Polar Capital Tech seem to hold pretty much the same holdings as IXN but with stupidly high charges (circa 1.3% I think) - I'd rather a cheap tracker than an expensive active fund.

There's always a NASDAQ tracker but that seems a poor alternative, given it's not just tech and US only. Anyone have any suggestions or alternatives?

[Scudsurfer]

I use IITU however this is an S&P 500 technology tracker so not global. Fees are 0.15 %.

[EthicsGradient]

SPDR MSCI World Technology UCITS ETF (WTEC) appears to be available on II.

[Brabant]

Thanks, EthicsGradient, looks suitable - I must have overlooked that one

[Sobraon]

WTEC sounds interesting, can see it listed on ii but not on an iWeb search. IWeb say 'not ISA qualified' on the phone.

[Urbandreamer]

IT's such as Polar Capital Tech seem to hold pretty much the same holdings as IXN but with stupidly high charges (circa 1.3% I think) - I'd rather a cheap tracker than an expensive active fund.

Scotish Mortgage (SMT) is not "officially" a Tech fund, but in practice has been since it's inception. While it IS an active fund, the charges are quite low (0.37%). It's DEFINATELY not a tracker. It can't be given that it holds shares in so few companies, but they are currently tech companies.

I too am put off by Polar's charges. Though Ben Rogoff does have a point that good people need paying and the results speak for themselves. You pay your money and take your choice.

FWIW I and my kids have some SMT.

Another alternaltive is ROBG etf.
Not quite tech, automation instead.
You get the likes of gearbox manufacturers in the portfolio, as they are used in robots.

I have some of that as well.

[BrummieDave]

Scotish Mortgage (SMT) is not "officially" a Tech fund, but in practice has been since it's inception.

Was "Tech' around 111 years ago...?

In its broadest sense I think it was, and SMT always invested primarily overseas in early industrialisation, initially in North America, then Japan when they developed what we now call 'tech', then back to North America as we see now.

[mc2fool]

Scotish Mortgage (SMT) is not "officially" a Tech fund, but in practice has been since it's inception.

Was "Tech' around 111 years ago...?

In its broadest sense I think it was, and SMT always invested primarily overseas in early industrialisation, initially in North America, then Japan when they developed what we now call 'tech', then back to North America as we see now.

111 years ago it was The Straits Mortgage and Trust Company set up by the fabled Colonel Baillie and Mr Gifford themselves to lend money to rubber planters 'cos of the boom caused by the demand for tyres for that new-fangled bit of tech, the motorcar. Riding that particular boom in a similar way to how some smart folks got rich in gold rushes from selling pickaxes and shovels to prospectors. Nice history at https://en.wikipedia.org/wiki/Scottish_Mortgage_Investment_Trust

As to whether SMT is a "tech" IT or not, folks do like to say so ... hey look at its holdings, right? But is Amazon a tech company, or a retailer? Of course, the two aren't necessarily exclusive....but what about the others? Well, SMT themselves say their biggest sectors are:

Consumer Services 38.5%
Technology 21.6%
Health Care 16.8%
Consumer Goods 9.4%
Financials 7.8%

30 Sep 2019 Interim Report, PDF page 6 http://documents.financialexpress.net/L ... 841158.pdf

Is that 21.6% enough to make SMT a "tech" IT? Well to those that say yes, you might like to note that according to Vanguard, the S&P 500 is 23.2% information technology, so that must make VUSA a tech ETF https://www.vanguardinvestor.co.uk/inve ... _fund_link

[1nvest]

...you might like to note that according to Vanguard, the S&P 500 is 23.2% information technology, so that must make VUSA a tech ETF

Yes some do opine that the US stock index is largely a tech sector tilt play. Go global (index) and often it will be largely tech (due to US share of global market cap), financials and oil/telecoms. For a global fund you're exposed to currency/country/liquidity risk factors, along with tax and compliance/reporting risks (some markets forbid foreign investors access (China), and more often apply dividend withholding taxes).

Entire countries stock indexes can fundamentally be a sector tilt. Where similar exposure (risk/reward) could equally have been achieved via domestic stock exchange listed holdings in the same sectors, but where foreign currency risk/reward (stock +/- currency gain/loss) may be hedged (by firms hedging their foreign currency exposure - as is quite common). Expanding that to include stocks listed in other stock exchanges/currencies can instate the risk/reward from currency fluctuations.

Compare Terry's Accumulation HYP rewards to the global equal weighted stock index since 2006 https://www.msci.com/documents/10199/f7 ... 8929255210 and if you omit the recent Corona virus drop (Terry's is fiscal data, whilst that global equal weighted data set is calendar years) ... and they've compared broadly closely in total returns despite being fewer than 40 stocks (TJH) compared to over 1500 stocks.

I guess you could reflect much of a global index fund with perhaps just 8 stocks diversified across the main sectors and currencies. The suggestion that you need to own the entire haystack to capture the few that do incredibly well is misplaced. 1000 stock holdings equally weighted and with one rising ten-fold adds very little to the whole. 10% in each of ten stocks and if one spikes even 10% then that will add more to the whole. Another example of how you don't need to buy the haystack is provided by comparing the Dow 30 stocks to the S&P500 stocks. https://www.forbes.com/sites/robisbitts ... ab3d26164f ... different, but broadly tending to provide comparable rewards.

[Lootman]

As to whether SMT is a "tech" IT or not, folks do like to say so ... hey look at its holdings, right? But is Amazon a tech company, or a retailer? Of course, the two aren't necessarily exclusive....but what about the others? Well, SMT themselves say their biggest sectors are:

Consumer Services 38.5%
Technology 21.6%
Health Care 16.8%
Consumer Goods 9.4%
Financials 7.8%

If SMT were to follow the S&P sector classification then it would be different again. So for example some common "tech" names that are not in the S&P tech sector include Amazon, Facebook and Google/Alphabet.

Amazon is considered to be in "Consumer Discretionary" whilst FB and GOOG are in "communication services".

Think Visa is a financial? Think again, S&P classes it as tech, along with Mastercard and Paypal.

Many consider Apple to be a consumer share as well.

So anyone wishing to invest in "tech" first needs to define it.

[BrummieDave]

I was looking for similar to OP when I shuffled the pack recently, and could only find L&G's Global Tech Index Fund. As I tend not to hold open ended funds, I passed this by. WTEC isn't available on my platform, so that was discounted too.

As Lootman points out, as companies that started as 'pure tech' or 'tech disruptors' become highly established global brands, if it's this you're looking for, which I was, pure tech plays may not cut it.

I ended up combining a NASDAQ 100 ETF (using iShares CNX1) and Polar Capital Tech (PCT), the latter giving the non US exposure I was looking for. I also hold SMT which again, has non-US tech exposure, plus an S&P 500 ETF (using Vanguard's VUAG) which sweeps up the rest of the US.

These four provide both the tech and US tilt I was looking for, and sit on top of my biggest holding, VWRL for overall global exposure (which again, provides exposure to the US corps we often think of as tech).

Overall it's a relatively low cost tech and US tilted PF, with PCT being the stand out in cost terms, but gives the return to back it up, and is averaged down by the lower cost ETFs.

[monabri]

VUAG and VUSA seem similar...their holdings and percentages are the same. It just seems to be their definitions in terms of currencies. I wouldn't know which one would be best for a UK resident. I only ask as I'd come across VUSA but not VUAG.

(I have smallish holdings in PCT, SMT, VUSA in decreasing order of investment.).

[AJC5001]

VUAG and VUSA seem similar...their holdings and percentages are the same. It just seems to be their definitions in terms of currencies. I wouldn't know which one would be best for a UK resident. I only ask as I'd come across VUSA but not VUAG.

That's because VUSA is the distributing and VUAG the accumulating version of the same fund. If you don't need the dividend paid out, the accumulating version does the reinvestment for you.

Adrian

[sjeh]

There's also WCLD which tracks the EMCLOUD emerging cloud index maintained by Bessemer Venture Partners (a leading VC fund)