TEC - ETF Overview
A Comprehensive Guide to the TD Global Technology Leaders Index ETF (TEC)
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TD Global Technology Leaders Index ETF (TEC) - Snapshot
Overview
The TD Global Technology Leaders Index ETF (TEC) is designed to track the performance of global mid-to-large capitalization technology companies. It aims to provide investors with exposure to the technology sector, capturing growth across different regions and sectors.
Investment Strategy
TEC follows a passive management strategy, seeking to replicate the performance of the Solactive Global Technology Leaders Index. The portfolio managers invest in and hold a proportionate share or a sampling of the constituent securities of the index.
The Solactive Global Technology Leaders Index tracks the performance of leading global technology companies. It includes not only traditional tech firms but also businesses with significant disruptive potential in areas like cybersecurity, e-commerce, robotics, artificial intelligence, autonomous vehicles, and cloud computing.
Top Holdings
The top holdings in TEC include major technology companies.
Sector Allocation
TEC is heavily weighted towards the technology sector within the U.S. market, with the following major allocations:
Risk Level
HIGH - due to its heavy concentration in the technology sector, which is known for its volatility and sensitivity to market changes.
Performance
Since its inception, TEC has delivered an average annual return of 21.64%.
Expense Ratio
The expense ratio for TEC is 0.39%, which is relatively low for a technology-focused ETF.
This means that for every $1,000 invested, the annual cost would be $3.90.
Dividend Yield
TEC offers a very low dividend yield between 0.09%, with dividends paid out quarterly.
This means that if you invest $1,000 in this ETF, you can expect to receive approximately $0.90 in dividends over a year, assuming the yield remains constant.
Other Information
Inception Date: TEC was launched in May 2019.
Net Assets: As of November 2024, TEC has net assets of approximately CAD 2.99 billion.
Similar Alternatives
Here are some similar alternatives to the TD Global Technology Leaders Index ETF (TEC):
Invesco NASDAQ 100 Index ETF (QQC.TO): Tracks the NASDAQ 100 Index, providing exposure to major tech companies like Apple, Microsoft, and Amazon.
iShares S&P/TSX Capped Information Technology Index ETF (XIT.TO): Focuses on Canadian technology companies, offering a more localized tech investment.
BMO NASDAQ 100 Equity Index ETF (ZNQ.TO): Another option tracking the NASDAQ 100 Index, similar to QQC.
iShares NASDAQ 100 Index ETF (CAD-Hedged) (XQQ.TO): Provides exposure to the NASDAQ 100 with currency hedging to protect against exchange rate fluctuations.
Here's a comparison of the expense ratios, yield, and performance of the XEI ETF and its close alternatives:
Target Investors
The TD Global Technology Leaders Index ETF (TEC) caters to investors looking for exposure to the technology sector, especially those focusing on mid-to-large capitalization technology firms worldwide. It's suitable for:
Growth-oriented investors: Those looking for capital appreciation over the long term.
Tech sector enthusiasts: Investors who want to invest in a broad range of technology companies without picking individual stocks.
Diversified portfolios: Investors aiming to diversify their holdings within the technology sector.
Long-term investors: Those who prefer a buy-and-hold strategy to benefit from the growth potential of the technology sector.
Reason to Invest…
Exposure to Technology Sector: TEC provides broad exposure to the technology sector, including mid- and large-cap companies globally.
Growth Potential: The technology sector has historically shown strong growth potential, making it an attractive option for long-term investors.
Diversification: TEC includes a diverse range of technology companies, reducing the risk associated with investing in individual stocks.
Low Expense Ratio: With an expense ratio of 0.39%, TEC is relatively cost-effective compared to other actively managed funds.
Strong Performance: TEC has shown impressive performance since its inception, with an annualized return of 21.64%.
Reason Not to Invest…
Sector Concentration Risk: Investing heavily in one sector, such as technology, can be risky if the sector underperforms.
Market Volatility: The technology sector can be highly volatile, leading to significant fluctuations in value.
Overvaluation Concerns: Some technology stocks within TEC may be overvalued, which could impact future returns.
Interest Rate Sensitivity: Rising interest rates can negatively affect growth stocks, which make up a large portion of TEC.
Lack of Exposure to Other Sectors: Focusing solely on technology means missing out on potential gains from other sectors like healthcare, energy, or financial services.