DXYZ, ARKW, IHAK: 3 Hot Tech Funds for Your Summer Watchlist


  • Some of the most intriguing tech funds are worth stashing on a watchlist and the tech trade begins to churn investors’ stomachs.
  • Destiny Tech100 (DXYZ): Where does the exciting basket of private firms head next after its recent boom and bust?
  • ARK Next Generation Internet Fund (ARKW): With exposure to the fintech, metaverse and AI themes, ARKW certainly stands out as a must-watch Cathie Wood fund.
  • iShares Cybersecurity and Tech ETF (IHAK): The cybersecurity threats are not going away anytime soon. As threats worsen, investment in cybersecurity defenses should stay robust.
hot tech etfs - DXYZ, ARKW, IHAK: 3 Hot Tech Funds for Your Summer Watchlist

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As the technology sector rolls across a bumpier part of the road, investors eager to top-up may have a chance to get some better prices as the choppy second quarter of the year continues. Undoubtedly, it’s easy for a new investor to lose their cool as the results from some of the market’s hottest growth stocks begin to come in. That said, it’s never a good idea to let emotions drive your investment decisions.

Big bounce-back days like the one enjoyed on Tuesday show many investors why it’s often a bad idea to throw in the towel after stocks run into a losing streak. For long-term investors who want to capitalize on the best emerging ideas in the tech sector, there are a handful of interesting exchange-traded funds (ETFs) and closed-end funds (CEFs) to get the job done.

So, whether or not a wrecking ball is headed for tech stocks, I find it worthwhile to stash the following funds on one’s radar.

Destiny Tech100 (DXYZ)

Rocket launching into space
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It’s hard to name another fund that’s been nearly as action-packed, exciting and volatile as the Destiny Tech100 (NYSE:DXYZ). This closed-end fund (not to be confused with ETFs) allows everyday retail investors to invest in some of the hottest innovative private companies today.

Indeed, it can be tough not to get a bit enthused after seeing the types of private firms underneath the hood. From Elon Musk’s private space company SpaceX (the largest holding in the DXYZ) to OpenAI and some smaller firms we have yet to appreciate, the DXYZ certainly seems to be a pretty exclusive club.

Chatting about DXYZ is sure to win you some ears at the dinner table. However, you will pay a colossal premium to net asset value (NAV) to punch your ticket. That is even after the recent collapse in shares from its near-$100 peak to $28 trough. That’s a one-way ticket down of more than 70%.

Many pundits have the NAV pinned at just shy of $5. Indeed, paying north of $28 per share for $5 of value doesn’t seem to make a whole lot of sense. Not even if you expect fireworks should SpaceX decide to have an IPO in the future.

With the IPO environment blazing hot, it certainly seems exhilarating and exclusive to have a stake in a private firm like SpaceX before it has a chance to go public. It’s not hard to imagine many Elon Musk fans wanting to invest in SpaceX, regardless of the price.

Personally, I’m sitting on the sidelines until the premium to NAV slims further. Much further. Who knows? Perhaps the DXYZ will hit single digits if the market sell-off intensifies.

ARK Next Generation Internet ETF (ARKW)

Logo for Ark Invest displayed on phone with logo in background as well, symbolizing Cathie Wood stocks
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ARK Next Generation Internet ETF (NYSEARCA:ARKW) stands out as far less speculative than the DXYZ. The fund, which is managed by Cathie Wood, holds shares of some high-tech growth stocks that show disruptive potential.

The stock imploded back in 2021 and 2022, eventually bottoming out to start 2023 fresh. Since those lows, ARKW has been rallying with fury. More recent momentum seems worth getting behind, with shares now up over 55% in just the past year.

Even as many investors pull money out of Cathie Wood’s Ark Invest funds, the ARKW ETF still looks compelling. That’s especially the case for investors seeking disruptive growth at relatively reasonable prices of admission.

Coinbase (NASDAQ:COIN) is a top holding and a major contributor behind the fund’s past year of relief gains. With a good mix of stocks playing on fintech, the metaverse and AI, I wouldn’t be afraid to keep the fund. It is my favorite of the Ark line and on my radar going into summer.

iShares Cybersecurity and Tech ETF (IHAK)

A digital illustration of a hacker in a blue sweatshirt. Cybersecurity Stocks to Sell
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If you want to take thematic investing to the next level, a cybersecurity ETF like the iShares Cybersecurity and Tech ETF (NASDAQ:IHAK) is worth considering. Amid the rising global risk of cyber threats, it’s unsettling to learn of a new company being compromised by cyber attackers.

Even a company as large as Microsoft (NASDAQ:MSFT) needs to stay vigilant in the face of rising cybersecurity risks. With the rise of artificial intelligence (AI), I believe the severity and frequency of major breaches stand to be amplified. And with that, everybody will need to spend big money to bolster their cybersecurity defenses.

Indeed, the cybersecurity tech theme is one that I expect to lead to solid results over the long run. With the recent correction in the IHAK ETF, investors may wish to make a move. Either way, the thematic ETF is worth watching very closely as the cybersecurity good guys strive to stay ahead of the hacker bad guys.

On the date of publication, Joey Frenette owned shares of Microsoft. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Joey Frenette is a seasoned investment writer specializing in technology and consumer stocks. Contributing to the Motley Fool Canada, TipRanks, and Barchart, Joey excels in spotting mispriced stocks with long-term growth potential in a fast-paced market.

Article printed from InvestorPlace Media, https://investorplace.com/2024/04/dxyz-arkw-ihak-3-hot-tech-funds-for-your-summer-watchlist/.

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