Why tech deserves a place in your investment portfolio

Technology is no longer just a sector. It has become part of how the world works.

We use technology when we bank, shop, communicate, study, work, pay bills, book rides, order food and invest. For many Filipinos, technology is no longer a luxury. It is already part of daily life. That is why I believe long-term investors should seriously consider having some exposure to technology in their investment portfolio.

Of course, this does not mean putting all your money in tech stocks. That would be risky. Technology can be volatile. Prices can go up quickly, but they can also fall sharply. Artificial intelligence (AI), semiconductors, cloud computing, cybersecurity, digital payments and software companies can present great opportunities, but they can also be expensive and unpredictable.

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So the principle is not to chase hype. The principle is to participate wisely.

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For Filipino investors, this matters because our local stock market has limited direct exposure to global technology leaders. The Philippine Stock Exchange has banks, property companies, conglomerates, utilities, consumer firms and some telco-related businesses. These are important companies, but if your entire portfolio is purely local, you may miss out on the growth of global innovation.

Think about what is shaping the future: AI, cloud infrastructure, cybersecurity, robotics, e-commerce, fintech, electric vehicles, semiconductors and digital platforms. These are not just trends for Silicon Valley. These are forces reshaping the global economy.

Even here in the Philippines, we already see how technology changes behavior. Many Filipinos now use e-wallets, digital banks, online investing platforms, delivery apps, online learning tools, telemedicine and digital payment systems.

A sari-sari store owner who accepts digital payments can serve customers more conveniently. An overseas Filipino worker can send money faster. A young professional can invest globally through digital platforms. A small business can market products through social media and collect payments online.

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As investors, we should ask: if technology is changing how people live, work and spend, should our portfolio have some exposure to the companies building and benefiting from that change? I believe the answer is yes, but with wisdom.

One practical way Filipino investors can gain technology exposure is through global equity funds or feeder funds available locally through mutual funds and unit investment trust funds (UITFs). This is helpful because not every Filipino investor is ready or comfortable opening an international brokerage account. Some prefer to invest through local banks, trust companies, fund providers, or platforms they already know.

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A feeder fund is a local fund that invests most or almost all of its assets into a target fund abroad. In simple terms, instead of buying foreign technology stocks directly, the local fund gives you access to a global or US technology portfolio.

Some options available in the Philippines include: BPI World Technology Feeder Fund, which invests in a target fund focused on technology stocks; ATRAM Global Technology Feeder Fund, which seeks long-term capital appreciation through a collective investment scheme; Security Bank US Technology Equity Index Feeder Fund, which tracks the Invesco Nasdaq-100 ETF as its target fund; and Manulife Global Technology Equity Feeder Fund, which invests in a diversified technology strategy.

For many Filipino investors, these feeder funds are more accessible than buying individual US tech stocks. They also provide professional fund management and diversification. However, accessibility does not remove risk. These are still equity funds, and many are classified for aggressive investors. For example, BPI’s World Technology Feeder Fund is classified as a feeder fund-equity with an aggressive risk classification, while Security Bank’s US Technology Equity Index Feeder Fund is also classified as a feeder fund-equity and aggressive.

This reminder is important because many people get excited about technology only after prices have already gone up. They hear about AI, Nvidia, Apple, Microsoft, Google or Tesla and then they feel they must invest immediately. That is not always investing. Sometimes, that is fear of missing out.

A wise investor does not simply ask, “What is popular?” A wise investor asks, “Does this fit my goals, time horizon, risk tolerance and overall asset allocation?”

My usual reminder still applies: build the foundation first. Increase your cash flow. Get out of bad debt. Build your emergency fund. Protect yourself from major life risks. Then invest for the future. Technology investing should be part of a plan, not a shortcut to riches.

We also need to remember that not all technology investments are the same. A giant profitable company is different from a speculative startup. A diversified feeder fund is different from buying one hot stock. A broad global equity fund is different from a concentrated technology fund.

Some technology companies have strong earnings, global reach and durable advantages. Others are still driven mainly by promise and hype.

That is why education is crucial. Never invest in something just because everyone is talking about it. Study the business. Understand the fund. Read the fact sheet. Know the fees. Check the risks. Understand whether the fund is peso or dollar-denominated. Ask how it fits your overall portfolio.

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Randell Tiongson is a registered financial planner of RFP Philippines. To learn more about personal financial planning, attend the 116th RFP program this June. Email [email protected] or visit rfp.ph to learn more about the program. INQ