Thus, in addition to traditional tech holdings like Apple and Cisco, it also has holdings like high-growth biopharma firm Amylin Pharmaceuticals (NASDAQ:AMLN) and storage provider NetApp (NASDAQ:NTAP).
BUFTX has been a consistent winner for the past three years, averaging annual returns of about 16% — this year is just slightly behind at more than 14%. It’s the highest-rated mutual fund on the list, getting 5 stars from Morningstar, and it’s also the most fee-friendly, with no load and just 1.01% in expenses. Minimum investment is $2,500.
Vanguard Information Technology ETF
ETFs often are able to provide lower fees because the portfolio is tied to an index rather than requiring professional management.
One of the top tech ETFs is the Vanguard Information Technology (NYSE:VGT) fund, which has about $2.4 billion in assets. It is based on the MSCI U.S. Investable Market Information Technology 25/50 Index, which is heavily weighted to large caps like Apple, IBM (NYSE:IBM) and Intel (NASDAQ:INTC).
For the past three years, VGT has posted an impressive average annual return of 15.7%. Also standing out is its thin 0.19% expense ratio, far undercutting the mutual fund options.
First Trust ISE Cloud Computing ETF
While VGT and a number of other funds offer broader tech exposure, there’s something to be said for more focused ETFs. For example, if you want to get exposure to the growing world of cloud computing — a technology that leverages the Internet to deliver business applications, which allows for lower costs and improved capabilities — you can invest in the First Trust ISE Cloud Computing ETF (NASDAQ:SKYY).
SKYY has only been in operation for more than a year — it’s down about 7% since its inception, though up about 9% in the past 52 weeks. And while it’s a passively indexed fund like VGT, its expenses are higher, at 0.6%.
Tom Taulli runs the InvestorPlace blog IPOPlaybook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli. As of this writing, he did not own a position in any of the aforementioned securities.