For investors seeking fast-growing stocks with lots of long-term upside, one fund to consider is the iShares U.S. Tech Breakthrough Multisector ETF (NYSE Arca: TECB). This exchange-traded fund (ETF) gives investors exposure to stocks which can benefit from breakthrough technologies. Some of the areas included are robotics, artificial intelligence, cloud, data tech, cybersecurity, and genomics.
As its name suggests, there are multiple sectors within the ETF, but the biggest exposure is to tech, which accounts for 57% of the fund’s holdings. Communication stocks are the next highest sector represented at 13%, followed by healthcare at nearly 12%. Tech giant Nvidia (NASDAQ:NVDA) is the largest holding at around 5.4%, with Meta Platforms (NASDAQ:META) trailing closely behind at 5.2%. Besides those two stocks, however, every other holding accounts for less than 5% of the ETF’s portfolio.
The ETF charges a management fee of 0.4% which is modest given its size – there are 175 holdings in the ETF. One risk for investors, however, is the soaring valuation of tech and growth stocks of late. The fund averages a price-to-earnings ratio of more than 43, which could be a bit high for conservative investors.
But if you want exposure to companies focusing on next-gen technologies, the Tech Breakthrough Multisector ETF could be suitable for your portfolio. The fund has generated total returns (including dividends) of 48% over the past 12 months, and over five years, those returns come in at around 90%. As long as you’re okay with the volatility that comes with growth stocks, this could make for a good long-term investment.
