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10 Best Canadian Tech ETFs in February 2023

In this article, I will introduce you to some of the best Canadian Technology ETFs and explain the pros and cons of each fund.

Canadian investors who are looking for a long-term investment that has the potential to beat the market may want to look at the technology ETF sector.

These funds are full of the best Canadian tech stocks and offer exposure to the broader sector rather than trying to beat the market with individual stock picks.

ETFs are an excellent way for Canadian investors to diversify their portfolios with an asset with much lower management fees than traditional mutual funds.

What is a Technology ETF?

A Technology ETF is as it sounds: a fund that provides a basket approach to the broader tech industry or that focuses on a specific tech sector.

Technology ETFs hold high-growth tech stocks and can potentially return massive gains in the future.

Investing in these does come with some volatility so a higher risk tolerance is important when investing in any Canadian Tech ETF (similar to Energy ETFs, Metaverse ETFs, and other themed ETFs).

Technology stocks are a popular investment, and some of the largest companies in the world, such as Apple, Tesla, Google, Facebook, and others, are represented in these ETFs.

Best Tech ETFs in Canada

The top 10 Canadian technology ETFs on this list are:

  • Invesco NASDAQ 100 Index ETF (QQC)
  • TD Global Technology Leaders ETF (TEC)
  • iShares S&P/TSX Capped Information Technology Index ETF (XIT)
  • BMO NASDAQ 100 Equity Index ETF (ZNQ)
  • iShares NASDAQ 100 Index ETF (CAD-Hedged) (XQQ)
  • Harvest Tech Achievers Growth and Income ETF (HTA)
  • Emerge ARK Global Disruptive Innovation ETF (EARK)
  • ARK Innovation ETF (ARKK)
  • Evolve Cyber Security Index ETF (CYBR)
  • Evolve Automobile Innovation Index Fund (CARS)

1. Invesco NASDAQ 100 Index ETF (QQC)

QQC is Invesco’s answer to the NASDAQ 100 Index ETF. It was established very recently, in May of 2021 and trades on the Toronto Stock Exchange.

While the fund states that it has 104 total holdings, this is actually the total sum of underlying holdings.

The reason for this is that the QQC holds just two actual assets: the Invesco QQQ, which tracks the NASDAQ 100 index, as well as a 34% weight in QQQM, which also tracks the NASDAQ 100 index.

What is the difference between the two? QQQM has a slightly lower MER of 0.15% compared to the 0.20% for QQQ.

Here is a list of the top holdings in QQC:

And here are some key facts about QQC:

  • MER: 0.20%
  • Number of stocks: 2 assets, 104 underlying holdings
  • Dividend yield: 1.18%
  • Distribution frequency: Quarterly
  • Assets Under Management (AUM): $36 million
  • 1-year performance: 9.57%
  • Eligibility: both registered and non–registered

Since QQC is such a new ETF, we don’t really have any long-term performance history.  Still, we can reasonably assume it will mirror other NASDAQ 100 Index ETFs.

QQC has a noticeably higher dividend yield and distribution yield that pays every quarter.

The MER of 0.20% is extremely low, and the Invesco NASDAQ ETFs, QQQ, QQC, and QQQM, are some of the most popular technology ETFs on the market.

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2. TD Global Technology Leaders ETF (TEC)

TEC is a Canadian Technology ETF from TD Asset Management that trades on the Toronto Stock Exchange and was established in 2019.

This ETF provides exposure to Canadian, American, and International technology companies for a low MER of just 0.38%.

TEC holds an impressive 296 different stocks, most of which you will recognize. TEC has an 85.8% weighting towards American technology companies.

Here are some of the largest holdings in TEC:

And here is the geographical exposure breakdown of TEC:

Only 1.10% of the stocks in the fund are Canadian, so TEC is a great ETF for Canadian investors who want international exposure.

Here are the key facts for TEC:

  • MER: 0.38%
  • Number of stocks: 296
  • Dividend yield: 0.60%
  • Distribution frequency: Quarterly
  • Assets Under Management (AUM): $1.5 billion
  • 1-year performance: 8.09%
  • Eligibility: both registered and non–registered

With TEC, you get an excellent MER at 0.38% and a reasonable dividend yield of 0.60%. Gaining exposure to international tech companies is a bonus that not many other ETFs can provide.

3. iShares S&P/TSX Capped Information Technology Index ETF (XIT)

XIT is an ETF from iShares by Blackrock that was established back in 2001. It trades on the Toronto Stock Exchange in Canadian dollars.

This ETF holds some of the best Canadian tech companies and has a total of 28 different holdings. Here is a list of some of the largest holdings in the ETF:

As you can see Shopify and Constellation Software make up more than 52% of the weight in the ETF.

Here are some key facts for XIT:

  • MER: 0.61%
  • Number of stocks: 28
  • Dividend yield: 0.03%
  • Distribution frequency: Semi-annually
  • Assets Under Management (AUM): $521 million
  • 1-year performance: -11.21%
  • Eligibility: both registered and non–registered

XIT is not an ETF for investors seeking out high-paying dividends. The fund pays out on a semi-annual basis and has a very low yield.

Investing in XIT requires confidence that Canadian tech stocks like Shopify and Constellation Software will continue to outperform.

This ETF has a medium to high-risk rating, which is evident in the negative returns over the past year.

Compared to other Canadian tech ETFs, XIT has a fairly high MER. At 0.61%, it is the equivalent of paying $6.10 in fees for every $1,000 invested in XIT.

4. BMO NASDAQ 100 Equity Index ETF (ZNQ)

ZNQ is an ETF from BMO Global Asset Management that was established back in 2019. The goal of this ETF is to track the NASDAQ 100 index.

The NASDAQ 100 is an index of 100 of the largest companies that trade on the NASDAQ. ZNQ holds all 100 stocks in the same weighted proportion as the NASDAQ 100 itself. Given that NASDAQ is dominated by mostly technology companies, ZNQ is a tech-heavy ETF.

ZNQ has a total of 103 holdings that are all US-based companies. Despite this, the ZNQ trades on the Toronto Stock Exchange, saving Canadian investors extra foreign currency fees and exchange rates.

Here is a list of the top ten holdings in ZNQ by weight:

Here is a glance at the sector allocation for the ZNQ ETF:

The names at the top of the list are familiar, as the NASDAQ is dominated by mega-cap tech companies like Apple, Microsoft, and Amazon.

Here are the key facts for ZNQ:

  • MER: 0.38%
  • Number of stocks: 103
  • Dividend yield: 0.14%
  • Distribution frequency: Annually
  • Assets Under Management (AUM): $211 million
  • 1-year performance: 11.27%
  • Eligibility: both registered and non–registered

ZNQ carries with it a medium risk, although some would argue these mega-tech companies that have achieved blue-chip status do not carry as much risk as they once did.

Like with most Canadian tech ETFs, ZNQ pays a small dividend that is distributed only once per year on an annual basis.

Since ZNQ tracks the NASDAQ 100 index, there is very little fund management necessary, allowing the ETF to have a lower MER of 0.38%.

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5. iShares NASDAQ 100 Index ETF (CAD-HEDGED) (XQQ)

XQQ is an ETF provided by iShares from Blackrock and was established back in 2011. It trades on the Toronto Stock Exchange and tracks the NASDAQ 100 index.

XQQ is our first look at a currency-hedged ETF. This means that in addition to holding the NASDAQ 100 stocks, XQQ also holds Canadian and US dollars to hedge against potential currency fluctuations.

Here is a look at the top holdings in XQQ:

  • MER: 0.39%
  • Number of stocks: 102
  • Dividend yield: 0.13%
  • Distribution frequency: Semi-annual
  • Assets Under Management (AUM): $1.9 billion
  • 1-year performance: 10.4%
  • Eligibility: both registered and non–registered

XQQ is a solid performer and a popular ETF with over $1.9 billion in AUM.

6. Harvest Tech Achievers Growth and Income ETF (HTA)

HTA is an ETF that trades on the Toronto Stock Exchange and was established back in 2015. It provides exposure to 100% US-based tech stocks.

HTA has 23 different tech stock holdings, with the largest weight dedicated to the semiconductor industry. Here are the top holdings in the HTA ETF:

And here is the sector distribution for HTA:

Here are the key facts for HTA:

  • MER: 0.85%
  • Number of stocks: 23
  • Dividend yield: 5.20%
  • Distribution frequency: Monthly
  • Assets Under Management (AUM): $244.5 million
  • 1-year performance:  19.99%
  • Eligibility: both registered and non–registered

HTA has had a profitable year, gaining 19.99% over the past twelve months. It has a fairly high MER but also pays out a high dividend yield on a monthly basis which can even out some of the higher costs.

Once again, this is a great way for Canadian investors to gain exposure to US tech stocks through the Toronto Stock Exchange.

7. Emerge ARK Global Disruptive Innovation ETF (EARK)

EARK is an ETF from Emerge Canada Inc, which trades on the Toronto Neo Stock Exchange and was established in July of 2019.

If the name sounds familiar, EARK tracks the Disruptive Innovation portfolio of the popular investment firm Ark Invest.

EARK is an actively managed ETF which means you can expect to pay a much higher MER than passively managed ETFs. Here are some of its top holdings:

Here are the key facts for EARK:

  • MER: 1.15%
  • Number of stocks: 36
  • Dividend yield: 0.00%
  • Distribution frequency: N/A
  • Assets Under Management (AUM): $98 million
  • 1-year performance: N/A
  • Eligibility: both registered and non–registered

EARK is an interesting ETF in that it provides Canadian investors with the ability to invest in the popular American ETF ARKK without any foreign exchange fees.

Aside from big tech stocks, there are other interesting investments in disruptive technology like cryptocurrency, 3D printing, and genomics.

The MER is definitely high for the technology ETF industry, and a lack of any dividend is not that appealing, even if tech stocks are not known for their dividends.

Emerge offers Canadian Technology ETFs that track every ETF that Ark Invest offers on the US markets.

8. Ark Innovation ETF (ARKK)

Ark Invest is a popular investment company owned by noted investor Cathie Wood. Ark ETFs are actively managed, and the Ark Innovation ETF is the company’s flagship fund.

The ETF was established in 2014 and trades on the US exchange. For Canadian investors, you might be better off taking a look at the previously mentioned EARK instead.

Here are some of the top holdings of ARKK.

And here is the geographical breakdown of the holdings in ARKK:

Here are the key facts for ARKK:

  • MER: 0.75%
  • Number of stocks: between 35-55
  • Dividend yield: 0.00%
  • Distribution frequency: N/A
  • Assets Under Management (AUM): $16 billion
  • 1-year performance:  -23.38%
  • Eligibility: both registered and non–registered

ARKK has had a tough year, as seen by its one-year performance. The ETF does not pay any dividends and does not have a set number of stocks, as it is actively managed daily.

Since ARKK is actively managed, it has a higher MER at 0.75% than most other ETFs. This ETF is for investors with a higher risk tolerance and a longer investing horizon.

9. Evolve Cyber Security Index ETF (CYBR)

CYBR is an ETF from Evolve which focuses specifically on the cybersecurity industry. It was established in 2017 and trades on the Toronto Stock Exchange.

CYBR is another Canadian dollar-hedged ETF. While this ETF itself is not specifically hedged, it is because it tracks the Solactive Global Cyber Security Index Canadian Dollar hedged (SOLGCYH).

CYBR has 55 different holdings from all over the world. Here are the top holdings of the fund:

  • MER: 0.40%
  • Number of stocks: 55
  • Dividend yield: $0.01 per share
  • Distribution frequency: Monthly
  • Assets Under Management (AUM): $263 million
  • 1-year performance: 10.55%
  • Eligibility: both registered and non–registered

CYBR has a reasonably 0.40% MER, and unusual for the technology sector, the ETF pays out a monthly dividend, although currently, it is only $0.01 per share.

CYBR is an excellent investment for Canadian investors who believe in the cybersecurity sector over the long term.

It provides excellent exposure to multiple different regions of the world as well, which is something you usually can’t get without incurring foreign exchange fees.

10. Evolve Automobile Innovation Index Fund (CARS)

CARS is the second Evolve ETF on the list and the second that mirrors a Solactive ETF. This fund tracks the Solactive Future Cars Index Canadian Dollar Hedged (SOLFCARH).

CARS trades on the Toronto Stock Exchange and was established back in 2017.

Here are the top holdings in the CARS ETF:

You’ll notice popular names like Tesla aren’t a heavily-weighted holding in this fund. Tesla only has a 1.97% weight in this ETF as of right now.

CARS provides a nice variety of different markets for Canadian investors to gain exposure to.

Here are the key facts for CARS:

  • MER: 0.40%
  • Number of stocks: 55
  • Dividend yield: $0.02 per share
  • Distribution frequency: Monthly
  • Assets Under Management (AUM): $91 million
  • 1-year performance:  -10.16%
  • Eligibility: both registered and non–registered

CARS is a nice investment for Canadian investors who are bullish on the electric vehicle sector moving forward.

With a decent MER and even a monthly distribution, CARS is a great way to invest in a basket of EV stocks without paying foreign currency fees.

How To Buy Tech ETFs in Canada in 2023

Questrade

Questrade is a great platform for Canadian investors to buy the best Canadian Tech ETFs for their portfolios.

It offers zero commission buying for ETFs and only has a fee for selling which is $4.95. This provides an incentive for investors to buy and hold the ETFs for the long term.

Questrade also supports options, stocks, mutual funds, bonds, CFDs, precious metals, and many other investment assets. It is one of the best trading apps in Canada.

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Wealthsimple Trade

Wealthsmiple is another popular brokerage platform amongst Canadians. It is a digital brokerage with both a mobile and desktop application.

Wealthsimple Trade offers zero commission fees for both buying and selling Canadian ETFs. It only supports stocks and ETFs.

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Qtrade

Qtrade is another Canadian investing platform that is a discount brokerage with competitive trading fees.

On Qtrade, Canadian investors can buy from a list of free Canadian ETFs to trade on the platform, which includes XIT.

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Are Technology ETFs a Good Investment?

Technology ETFs can be a great investment if you have a higher risk tolerance for your investments. Tech stocks can come with more volatility than other sectors.

Tech companies are among the most powerful and valuable in the world, and Technology ETFs give you exposure to them.

ETFs are great because they have low management fees, and you can get exposure to a basket of different companies. They also provide exposure to foreign stocks, which aren’t always available to trade on the Toronto Stock Exchange.

Taking advantage of discount brokerages like Questrade and Wealthsimple Trade which offer no-fee ETF trading, is a great way to get started.

How To Pick Technology ETFs

With hundreds of different ETFs to choose from, it is always a challenge to figure out which one is best for you.

Start by choosing ETFs with lower MERs so you maximize your gains in the long run.

You can also look at things like dividend yield and exposure to foreign stocks that would otherwise cause you foreign currency fees.

Technology ETFs that provide exposure to multiple different sectors will also come with lower volatility and risk.

Downsides of Tech ETFs and Stocks

The downsides of Technology ETFs and stocks are, of course, the volatility and risk involved with high-growth companies.

If you are a fan of dividends, few tech stocks pay these out. As you already saw, most tech ETFs pay a lower dividend yield than, say, an index fund.

Being exposed to just one sector can be risky for your portfolio as well. You will likely need to own other assets from other sectors if you want to be diversified.

Bonus: Top 5 Tech Stocks in Canada

Here are some of the top tech stocks to consider in Canada:

Shopify (TSE:SHOP)

An Ottawa-based eCommerce platform for online retailers and point-of-sale systems. The platform has well over 1.7 million businesses across 175 different countries as of May 2021.

Constellation Software (TSE:CSU)

Constellation Software is a diversified technology company that acquires smaller tech companies and holds them for the long term. Constellation owns over 500 different companies across various tech sectors.

Nuvei Corp (TSE:NVEI)

Nuvei is a Montreal-based company that processes electronic payments. It is the largest non–bank payment processor in the country and processes over $34 billion in payments around the world. Nuvei also trades on the NASDAQ exchange in the US under the same ticker symbol.

Lightspeed Commerce (TSE:LSPD)

Lightspeed started as a point of sale processor but has moved into also working in digital finance services. It is one of the most widely used payment processors in North America, especially at restaurants and hospitality businesses.

Well Health Technologies (TSE:WELL)

Well Health is one of Canada’s largest digital healthcare service providers, and its largest owner of outpatient health clinics. Well Health’s digital healthcare platform offers services like telehealth consultations, electronic medical records, and direct billing.

Conclusion

Investing in Canadian Technology ETFs is a fantastic way to add both domestic and international tech sector exposure to your portfolio.

Tech stocks come with higher risk and increased volatility than other sectors. For this reason, taking a basket approach with an ETF limits downside volatility.

Canadian investors who are looking to add tech ETFs can easily do so at discount brokerages like Wealthsimple and Questrade for commission-free ETF buying.

Canadian Tech ETFs FAQ

What is the best technology ETF for Canadians?

For Canadian investors, it’s difficult to beat QQC from Invesco. Tracking the NASDAQ 100 is one of the best and safest ways to invest in tech stocks.

Is TEC a Canadian ETF?

Yes! TEC is offered by TD Asset Management, and even though it tracks international tech companies, it trades on the Toronto Stock Exchange.

What is the largest technology company in Canada?

The largest technology company in Canada by market cap is Shopify. 

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Author

Gravatar for Enoch Omololu, MSc (Econ)
Enoch Omololu, MSc (Econ)

Enoch Omololu is a personal finance expert and a veterinarian. He has a master’s degree in Finance and Investment Management from the University of Aberdeen Business School (Scotland) and has completed several courses and certificates in finance, including the Canadian Securities Course. He also has an MSc. in Agricultural Economics from the University of Manitoba and a Doctor of Veterinary Medicine degree from the University of Ibadan. Enoch is passionate about helping others win with their finances and has been writing about money matters for over a decade. He has been featured or quoted in The Globe and Mail, Winnipeg Free Press, Wealthsimple, CBC News, Financial Post, Toronto Star, CTV News, Canadian Securities Exchange, Credit Canada, National Post, and many other personal finance publications. You can learn more about him on the About Page.

His top investment tools include Wealthsimple and Questrade. He earns cash back on purchases using KOHO, monitors his credit score for free using Borrowell, and earns interest on savings through EQ Bank.

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