The tech funds that have actually beaten the Nasdaq

Over the past decade, just five open-ended technology funds have returned more than the Nasdaq 100 index. Of these, only two were actively managed funds.  

The Nasdaq 100 contains the biggest stocks on America’s Nasdaq exchange, which is a who’s who of the tech industry due to its appeal to fast-growing companies looking to list their shares.  

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It is therefore often used as a proxy for tech shares, with investors in the UK easily able to own the market via exchange-traded funds (ETFs), such as Invesco EQQQ NASDAQ-100 ETF GBP (LSE:EQQQ) and iShares NASDAQ 100 ETF USD Acc GBP (LSE:CNX1) The largest positions are currently Nvidia, Microsoft, Apple, Amazon and Broadcom.  

Data to 8 August 2025 from FE Analytics shows among open-ended and ETFs only L&G Global Technology Index Trust, SSGA SPDR US Technology Select Sector Ucits ETF, SSGA SPDR MSCI World Technology Ucits ETF, Polar Capital Global Technology and Fidelity Global Technology beat the Nasdaq 100 index.  

There are also two top-performing technology investment trusts. Allianz Technology Trust and Polar Capital Technology Trust have beaten the Nasdaq 100 over the past decade, returning 654% and 583% respectively. 

Top open-ended funds and ETFs

Source: FE Analytics, data to 8 August 2025. Past performance is not a guide to future performance.

The passive funds leading the way have done so well due to their exaggerated exposure to American technology shares. This is because they are allowed to have positions greater than 10% of the portfolio so that they can accurately track their indices, whereas active funds face a 10% cap per position to reduce risk for investors. 

For example, SSGA SPDR S&P U.S. Technology Select Sector UCITS ETF has 23.7% in Nvidia and 19.2% in Microsoft, while L&G Technology Trust has around 15% in Nvidia and Microsoft.  

This has allowed them to reap high returns from the continued rise of America’s tech giants, with the cloud computing, social media and computer-chips stocks becoming ever larger.  

However, this is also a risk for these passive technology funds, as the tide may turn against the largest technology stocks. If companies such as Apple, Microsoft and Nvidia go sideways or fall in value, active funds that take the decision to avoid these shares could do better.  

Nasdaq has controls on its indices to prevent too much concentration in just a smaller number of shares. For example, in July 2023, it carried out a “special rebalance” of the Nasdaq 100 index. 

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As of the end of June 2023, Microsoft had a 12.8% weighting, Apple had a 12.2% weighting and Nvidia and Alphabet Inc Class A (NASDAQ:GOOGL) were around 7%. In total, the top 10 stocks accounted for around 55% of the portfolio. 

Following the rebalance, the share of the top 10 stocks fell to to 43%, with the largest percentage cuts to Nvidia and Microsoft. As of 8 August 2025, the Nvidia was a 10% position in the Nasdaq 100, followed by Microsoft at 8.8% and Apple at 7.8%.  

Of the three passive funds leading the charts, two invest globally (SSGR SPDR MSCI World Technology Ucits ETF and L&G Global Technology Index Trust) and one just owns US shares (SSGA SPDR S&P U.S. Technology Select Sector UCITS ETF). 

However, one key difference is that the L&G fund owns Taiwanese companies, such as TSMC, while the SPDR global fund sticks to developed world stocks. Another thing to note is that SSGA SPDR S&P U.S. Technology Select Sector UCITS ETF does not own “communication services” shares, so does not have a position in Alphabet or Meta. 

The winning active funds over the past decade have demonstrated a lot of manager skill to keep up with passive technology funds and the Nasdaq 100.  

How the top active funds invest

Polar Capital Global Technology and Fidelity Global Technology are two of the longest-running tech funds, with 20-year track records, and both have beaten the Nasdaq 100 over the past 10 years.  

Polar Capital Global Technology has been managed by Ben Rogoff since 2006, and co-manager Nick Evans since 2008, with two more managers added to the fund in 2023. The £6.3 billion fund invests in tech firms of all sizes but is currently biased towards large and mega-cap companies. The same team also manages Polar Capital Technology Trust.

The managers are very bullish on the potential of artificial intelligence (AI) to boost the tech sector further.  

Rogoff has said that he is an AI “maximalist” and thinks the technology will be transformative, with the latest models already “past the point of no return” on their abilities and impact. The largest positions in the fund include Nvidia, Meta and TSMC.  

Rogoff said: “Without wanting to get bogged down in trying to predict outcomes, do we feel as excited about the next five years as the past five? We absolutely do. We are three years into what is likely to be a multi-year investment cycle. We are beginning to see the adoption of some of the AI engines like ChatGPT, said to be used by 800 million people now. We are moving into a world of AI. It is exciting and emerging at the moment, but over the next five years it will move into the mainstream and it is really hard to know what that will look like.” 

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Fidelity Global Technology is more defensively positioned. Manager Hyun Ho Sohn has run the fund since 2013 and focuses on quality companies with sustainable growth prospects trading at attractive valuations. The price-to-earnings ratio of the fund is therefore reasonably low, at 20 times compared to 26 times for the average tech fund peer. Also, at more than 100 holdings, it is a very diversified fund.  

Sohn said recently that he is bearish on some large semiconductor stocks (he doesn’t own Nvidia) as he thinks AI data centre development is unsustainable, regardless of how much AI adoption and applications proliferate, but he does see plenty of opportunities in AI. 

“I continue to be positive on software and service businesses that are embracing AI, such as Salesforce, Workday, Teleperformance, and NiCE,” he said.

“I thus want to minimise AI capex downside risk to the strategy, but still benefit from rising AI penetration across the economy.” 

Of the funds with 20-year track records, L&G Global Technology, Polar Capital Global Technology and Fidelity both perform well, returning 1,813%, 1,804% and 1,740%. However, this is behind the 2,180% gain of the Nasdaq 100 index, according to FE Analytics.