Is the ATEC ETF the best way to invest in ASX tech shares?

If you’re looking for tech exposure, the BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC) is a popular way to get broad-based access to technology shares on the ASX.

ETF 101

An exchange-traded fund (ETF) basically lets you invest in a whole bunch of different businesses with a single investment.

It’s 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.

If you’re interested in learning about ETFs, check out Rask’s free beginner ETF course.

Getting to know the ATEC ETF

The ATEC ETF is all about giving Aussies exposure to the technology sector on the ASX. More specifically, it aims to track the performance of the S&P/ASX All Technology Index (before fees).

You don’t have to decide which ASX tech shares to invest in – with this ETF, you get a market-weighted exposure to various sub-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 in the ETF.

Those biggest 10 positions inside ATEC 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 25.7% weighting and the Xero weighting is the only other one above 10%, with an 11% weighting.

The BetaShares S&P/ASX Australian Technology ETF has an annual management fee of 0.48%.

Is ATEC 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.

Therefore, I wouldn’t want to buy ATEC 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.

If you’re searching for ASX share ideas, 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

From 200+ ETFs in Australia, our top investment analyst has just identified his #1 ETF for 2021 and beyond.

Low fees? Check.

Long-term growth potential? Check.

Regular cash returns? Check!

This ETF makes investing in ETFs "Super-Easy".

Simply click here or enter your email address below to access the full ETF report, ticker code, and step-by-step investment guide. Our expert's #1 ETF report is completely free.

No gimmicks, no payment, no credit card info. Just enter your email address below and we'll send you the report right away.

From 200+ ETFs in Australia, our top investment analyst has just identified his #1 ETF for 2021 and beyond.

Low fees? Check.

Long-term growth potential? Check.

Regular cash returns? Check!

This ETF makes investing in ETFs "Super-Easy".

Simply click here to access the full ETF report, ticker code, and step-by-step investment guide. Our expert's #1 ETF report is completely free.

No gimmicks, no payment, no credit card info. Just click the link below and enter your email address. We'll send you the report right away.

CLICK HERE TO GET THE REPORT

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

At the time of publishing, Jaz owns shares of Altium.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Keep reading:

General Financial Advice warning
The information on this website is general financial advice only. That means, the advice does not take into account your objectives, financial situation or needs. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. Please read our Terms & Conditions and Financial Services Guide before using this website.

© Rask Australia 2020

Join 20,000+ smart investors

Join the Rask Australia mailing and we’ll send you free investment reports, podcasts, expert insights, investing courses, ASX news and lots, lots more. All free. 

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian-owned.

feedback-icon

What can we do better?

Howdy, ASX investor.

I really care about your experience today.

Please, let me know if you have any suggestions we can use to improve our site and help others invest in ETFs. 

Cheers! 

Owen Rask