Investor focus on artificial intelligence (AI), semiconductors, and digital infrastructure shaped capital flows across technology markets in 2025, lifting a small group of specialized exchange-traded funds (ETFs) to the top of the performance tables.Notably, analysis of performance indicates that the leading technology ETFs combine strong returns with targeted exposure to the fastest-growing areas of the sector. Below are the top five ETFs in this category.Top 5 technology ETFs of 2025. Source: ETF DbCoinSh ...

Monetary Policy Impact - The Federal Reserve cut interest rates by a quarter percentage point for the second consecutive meeting, bringing the benchmark rate down to a range of 3.75%–4.00% [1] - The Fed will halt the reduction of its asset purchases effective December 1, ending the balance sheet runoff that began earlier this year [2] - Fed Chair Powell raised doubts about a further rate cut at the next meeting in December [2] Market Sentiment and Trade Relations - Hopes of easing U.S.–China trade tensions have lifted investor sentiment, with an understanding reached to pause new trade tensions and resume U.S. agricultural imports [3] - These developments are setting the stage for a likely rebound in risk assets and high-growth sectors [4] Sector-Specific Opportunities - **Technology**: Lower borrowing costs and reduced tariff tensions could boost the technology sector, particularly semiconductor and AI-driven companies, with ETFs like VanEck Semiconductor ETF (SMH) and Strive U.S. Semiconductor ETF (SHOC) expected to perform well [5] - **Growth Stocks**: Growth stocks typically outperform in a falling-rate environment, with ETFs like Invesco QQQ Trust (QQQ) and Vanguard Growth ETF (VUG) likely to surge amid an extended equity rally [6] - **Emerging Markets**: An improving U.S.–China relationship and a Fed rate cut are positive for emerging markets, with iShares MSCI Emerging Markets ETF (EEM) positioned favorably [7] - **Small Caps**: Smaller U.S. companies are expected to benefit from lower rates and increased consumer confidence, with iShares Russell 2000 Growth ETF (IWO) as a potential performer [8] - **High-Dividend**: High-dividend ETFs like Vanguard High Dividend Yield ETF (VYM) may provide steady income and become more attractive if bond yields fall [9] Future Outlook - A growing number of Fed officials favor holding off another rate cut, with traders reducing the probability of a December rate cut to 67% [11] - The ongoing AI-fueled market momentum is expected to continue, especially with the increased chance of a U.S.-China trade resolution [11]