Top Performing Tech ETFs For The 1st Half Of 2021

The first half of the year belonged to two specific segments of the tech sector - blockchain and semiconductors.
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It's not something that we've been used to over the past several years, but the tech sector was actually an underperformer during the 1st half of 2021. Trailing both the S&P 500 (SPY) and the total U.S. stock market (VTI) by about 1%, the sector has been fairly volatile and had a number of ups and downs as growth and cyclicals trade leadership depending on the state of the economy at the moment.

The U.S. economy looks like it's going to experience slowing growth in the 2nd half of 2021 as the labor market shows further signs of slack. This could end up working out well for tech. The idea of a growing but not fully growing economy tends to favor growth sectors, such as tech and consumer discretionary, so more gains could potentially be on the way. Communication services might fare particularly well as the delta variant of COVID spreads and some areas of the world reimplement social restrictions.

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The first half, however, belonged to two specific segments of the tech sector.

Here's the list of the top performing dividend ETFs for the 1st half of June 2021.

Top Performing Tech ETFs For The 1st Half Of 2021

Top Performing Tech ETFs For The 1st Half Of 2021

The top performing tech ETF of the 1st half was the Amplify Transformational Data Sharing ETF (BLOK), an actively-managed blockchain ETF that has spent much of the year on the top of these lists. The price growth in bitcoin, ethereum and dogecoin have clearly been driving interest in crypto-adjacent areas of the market. Next-gen tech amid cybersecurity breaches and a desire to move away from government regulation has also been fueling gains.

It shouldn't be any surprise then that all of the major blockchain ETFs show up on this list. The Siren Nasdaq NexGen Economy ETF (BLCN), the Capital Link NextGen Protocol ETF (KOIN) and the First Trust Indxx Innovative Transaction & Process ETF (LEGR), have produced varying degrees of returns. These three follow passively-managed indexes, which I'm not a big fan of in this fast-evolving space. I'm not sure if it's a contributing factor to lagging returns, but I do think BLOK offers better industry exposure. If you've followed my past coverage of the blockchain sector, you'll know that I'm not a fan of KOIN.

Semiconductors were also a big winner in the 1st half. The Invesco Dynamic Semiconductors ETF (PSI), the iShares Semiconductor ETF (SOXX) and the VanEck Vectors Semiconductor ETF (SMH), all returned more than 20%, but they weren't the only winners. The First Trust Nasdaq Semiconductor ETF (FTXL) and the SPDR S&P Semiconductor ETF (XSD) show up further down the list.

Among other first half winners:

  • iShares North American Tech-Multimedia Networking ETF (IGN) - Here's an ETF that drifts focuses mostly on communication equipment. It gained more than 22%, but is heavily concentrated at the top. Its top 5 holdings, including Motorola and Cisco Systems, account for nearly half of the portfolio's assets.
  • First Trust Nasdaq Technology Dividend Index ETF (TDIV) and ProShares S&P Technology Dividend Aristocrats ETF (TDV) - You may not think of dividends when considering tech ETFs, but a pair of dividend-focused ETFs sneak on the list. TDIV takes a more broad approach to investing in dividend payers, while TDV takes a narrower approach targeting only those with a 7-year minimum dividend growth history.
  • Defiance Next Gen Connectivity ETF (FIVG) - This ETF rode the bullishness of the infrastructure theme to double digit gains. 5G is expected to be a huge technological development over the next many years and FIVG remains the best ETF to play the trend.
  • Pacer Benchmark Data & Infrastructure Real Estate Sector ETF (SRVR) - This may not make sense as a traditional tech ETF, but its focus on mostly technology and data infrastructure makes it an interesting yield play on an adjacent industry. Its 2.3% yield is relatively modest, but the growth of this theme is the real opportunity.

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