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The tech sector has been a difficult place to invest over the last 12 months. With interest rates rising across the globe, tech valuations have been hit hard.
The good news is that analysts at Morgans believe the sector is now trading at an attractive level. When upgrading Megaport Ltd (ASX: MP1) shares last week, the broker commented:
In CY22 we had an underweight view on the technology sector. CY22 was brutal for technology and growth stocks. Inflation/interest rates were the main culprit. As we look into CY23 we think it’s improbable interest rate rises will be anywhere near as dramatic as CY23 so the macro backdrop looks better for tech.
Valuations for quality tech are now back to 20 year / long run averages (fair value). […] With the risk of multiple compression now hopefully behind us, fundamentals will once again matter. Quality tech can grow regardless of weak economic conditions. Profit growth should reignite interest in the tech sector once again and this profit growth should drive share price appreciation.
With that in mind, if you’re wanting to gain exposure to the tech sector, then you could consider doing so with exchange traded funds (ETFs).
Two highly rated tech-focused ETFs to consider are listed below. Here’s what you need to know about them:
BetaShares Global Cybersecurity ETF (ASX: HACK)
The first tech ETF to consider is the BetaShares Global Cybersecurity ETF. This fund gives investors access to the leading companies in the global cybersecurity sector. This is a sector that has been tipped to grow strongly over the next decade due to the growing threat of cybercrime.
Among the companies you’ll be investing in with this ETF are Accenture, Cisco, Cloudflare, Crowdstrike, Okta, and Palo Alto Networks.
VanEck Vectors Video Gaming and eSports ETF (ASX: ESPO)
Another tech ETF to consider is the VanEck Vectors Video Gaming and eSports ETF. This ETF gives investors access to a portfolio of the largest companies involved in the video game industry. This is a huge and growing industry that is estimated to include almost 3 billion active gamers.
This includes industry leaders such as graphics processing unit giant Nvidia and games developers Take-Two Interactive (GTA, Red Dead), Electronic Arts (FIFA, Sims, Apex Legends), and Roblox.