If you’re looking for ASX tech exposure, is BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC) the best way to do it?
What’s an exchange traded fund (ETF)?
If you don’t know what an ETF is then it could be a smart idea to look at Rask’s free beginner ETF investor course.
An ETF basically lets you invest in a whole bunch of different businesses with a single investment. Very handy if you want to get good diversification, but you don’t want to buy 50, or 100 or 1,000 businesses yourself. In-fact, I’d say buying 1,000 different companies yourself would be a very poor choice for all the brokerage costs alone.
What’s BetaShares S&P/ASX Australian Technology ETF?
This ETF is about giving Aussies exposure to the technology sector on the ASX. You don’t have to decide which ASX tech shares to invest in, with this ETF you get a market-weighted exposure to various sectors such as information technology, consumer electronics, online retail and medical technology.
If you’re familiar with the ASX term ‘WAAAX’ – kind of like FAANG – then you may like to know that all of those WAAAX businesses are represented in the top 10 holdings of the portfolio.
Those biggest ten positions are: Afterpay Ltd (ASX: APT), Xero Limited (ASX: XRO), SEEK Limited (ASX: SEK), REA Group Limited (ASX: REA), Computershare Ltd (ASX: CPU), Nextdc Ltd (ASX: NXT), Carsales.com Ltd (ASX: CAR), WiseTech Global Ltd (ASX: WTC), Altium Limited (ASX: ALU) and Appen Ltd (ASX: APX).
However, Afterpay is over a quarter of the portfolio with a 25.6% weighting and the Xero weighting is the only other one above 10% with an 11% weighting.
BetaShares S&P/ASX Australian Technology ETF has an annual management fee of 0.48%.
Is it a good way to get exposure to ASX tech shares?
If you’re focused on industry exposure, then it’s obviously a good way to get technology exposure.
Whilst I like that you get exposure to around 70 holdings, including smaller ones like Damstra Holdings Ltd (ASX: DTC), Whispir Ltd (ASX: WSP) and Frontier Digital Ventures Ltd (ASX: FDV), you are getting a very large amount of Afterpay exposure.
I wouldn’t want to buy it right now because of how expensive Afterpay shares are. But it could be one to think about in the future if you want ASX tech share exposure.
Before you consider BetaShares S&P/ASX Australian Technology ETF, I suggest getting a free Rask account and accessing our full stock reports. Click this link to join for free and access our analyst reports