Opportunity in Bear Market: Four Key Tech ETFs to Consider

The past few weeks have been challenging for the S&P 500 and other major U.S. economic indicators. On Tuesday, the S&P 500 reached its lowest point in four months, wiping out its gains from the recent election period. Similarly, the Nasdaq Composite index has struggled, dropping nearly 6% over the last six months.

While many traders typically favor bull markets, bear markets offer unique opportunities for long-term investors. The current dip in tech stock prices may be particularly appealing to those interested in acquiring shares in the microchip and artificial intelligence sectors that are currently in the spotlight. Below are four significant tech ETFs trading near 50-day lows that could be worth considering for long-term investment strategies.

XLK: Heavyweight Tech ETF Still Drawing Institutional Interest

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The Technology Select Sector SPDR Fund (NYSEARCA: XLK) is one of the largest technology ETFs in the U.S., focusing on major companies within the S&P 500. Managed by State Street Global Advisors, XLK holds over $68 billion in assets, making it a prominent choice for those seeking broad exposure to the tech sector.

The fund’s largest holdings—Apple, Microsoft, and NVIDIA—comprise over 40% of its total weight. Recently, the drop in major tech shares significantly impacted XLK, with its shares trading around $220, approximately 10% below their 52-week high of $242.

Analysts rate XLK with an aggregate rating of Moderate Buy, bolstered by insider buying. In the previous quarter, institutional investors acquired over $3.4 billion in XLK shares, while only $679 million were sold. For retail investors seeking a solid tech ETF suitable for long-term holding, XLK might represent a bargain.

XSW: A Diverse Software & Services Option Near 50-Day Lows

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If you are looking for a fund beyond giants like Apple and Amazon, consider the SPDR S&P Software & Services ETF (NYSEARCA: XSW). This fund targets the software and services segment of the S&P Total Market Index and includes sub-industries such as application software, interactive home entertainment, and IT consulting.

Investors interested in technology-focused funds that are less consumer-centric may find XSW appealing. Its leading holdings include D-Wave Quantum, Palantir Technologies, and AppLovin, which together account for just 4% of total assets. None of the stocks made up more than 1.25% of the fund in March 2025, making XSW a highly diversified option.

Currently, XSW is trading near its 50-day low price of $171. Institutional investors acquired $45 million in shares of the fund in Q4, emphasizing its potential for diversification.

FINX: FinTech ETF Showing $27M in Institutional Buys

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The Global X FinTech ETF (NASDAQ: FINX) offers another avenue for investors looking for exposure beyond traditional blue chips. The fund invests in the fintech sector, with top holdings in Fiserv and PayPal, which together constitute about 14.6% of the fund’s total weight.

Notably, this ETF includes more international tech options, with 23% of its holdings outside the United States.

FINX is currently the lowest-priced option in this analysis, trading at approximately $29 per share, near its 50-day low. Short interest in FINX has also decreased by over 12% in the last month, indicating improved market sentiment.

In the last quarter, institutional purchasing surged, totaling more than $27 million.

SMH: A Semiconductor ETF Near 50-Day Lows

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The VanEck Semiconductor ETF (NASDAQ: SMH) is a mid-sized fund with 25 holdings, providing a solid entry point into the semiconductor sector.

Its top holdings include NVIDIA, Taiwan Semiconductor Manufacturing, and Broadcom, which account for about 39% of the fund’s weight. Analysts offer a Moderate Buy consensus rating, reflecting optimism in SMH’s growth potential.

As of early March, SMH is trading near its 50-day low price of $223. Despite a 10% increase in short interest last month, investors looking to tap into the semiconductor sector’s potential may find value in this lower-cost ETF.

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The views and opinions expressed herein are those of the author and do not necessarily represent those of Nasdaq, Inc.