The investment landscape is buzzing with anticipation for the New Year, and savvy investors are already eyeing exchange-traded funds (ETFs) to bolster their portfolios. This year has been nothing short of a blockbuster for tech stocks, particularly in the US, and according to recent research from eToro, this trend isn’t likely to fizzle out anytime soon. A survey revealed that when clients were asked which sector they were most inclined to increase their allocation to in 2025, tech stocks emerged as the clear favorite, with 17% of respondents backing this sector. That’s a significant lead over financial services, which garnered just 10%.
I jumped on the iShares S&P 500 Information Technology Sector ETF (LSE:IUIT) back in July, and it’s been a thrilling ride. The ETF has consistently outperformed the S&P 500, boasting an impressive average annual return of 24.9% since 2019, compared to the S&P’s 15.4%. The fund’s heavy weighting in the Magnificent Seven—think Apple, Microsoft, and Nvidia—provides a solid foundation, with these three titans making up nearly 58% of the total fund. But it’s not all about the big names; the ETF also diversifies across 66 additional tech companies, allowing investors to mitigate risk while still tapping into growth potential. Sure, the cyclical nature of tech can lead to some disappointing returns during economic downturns, but I’m banking on the long-term trend of rising technologies like artificial intelligence, robotics, and quantum computing to keep this fund soaring.
On the flip side, I’m also keen to ramp up my exposure to the mining sector. With my current stakes in Rio Tinto and a few diversified funds, I’m looking to take advantage of the current market downturn, which has made many metals producers look like bargain buys. The VanEck Global Mining ETF (LSE:GIGB) is on my radar for this very reason. This fund tracks the S&P Global Mining Reduced Coal Index, deliberately excluding thermal coal companies, which aligns with the global shift toward cleaner energy sources. With the green revolution gaining momentum, the demand for metals is set to skyrocket, driven by the expansion of renewable energy, the rise of electric vehicles, and the need for updated power grid infrastructure.
The VanEck ETF holds shares of 129 producers, including industry heavyweights like BHP, Rio Tinto, Freeport-McMoRan, and Glencore. This diverse portfolio gives me exposure to key metals expected to see increased demand, such as iron ore, copper, lithium, and aluminum. While the fund has delivered an average annual return of 10.95% since 2014, it’s important to remember that operational hurdles, like disappointing exploration results or production hiccups, can still pose risks. However, the broad exposure helps cushion the blow and smooth out volatility.
As we gear up for 2025, these two ETFs—one rooted in the tech sector and the other anchored in mining—represent a strategic approach to diversifying my Self-Invested Personal Pension (SIPP). With tech poised for continued growth and the mining sector on the cusp of a green revolution, these investments could very well shape the future of my portfolio. The intersection of technology and sustainable resource extraction could be where the real action lies, and I’m eager to be part of it.
