Feeling Burned Out on Tech Stocks? Buy SPYM

For the past several years, U.S. tech stocks have been one of the best places for investors to put their money. The tech-heavy Nasdaq-100 index has gained almost 79% in the past five years, while the Roundhill Magnificent Seven ETF is up about 144% during that time.

But so far in 2026, investors are feeling skeptical about tech stocks. The Nasdaq-100 has underperformed the S&P 500 index year to date. Mag 7 tech names like Meta, Microsoft, and Tesla have gotten hit by big year-to-date declines in their share prices -- META shares are down 4.6%, TSLA is down 22.4%, and MSFT is down 23.3%.

SPYM data by YCharts

This doesn't mean tech stocks are "over." Investor fears about an artificial intelligence (AI) bubble or SaaSpocalypse might be overblown. But if you want to diversify your portfolio or find a more broad-based way to invest in stocks, the State Street SPDR Portfolio S&P 500 ETF (NYSEMKT: SPYM) could be a smart way to do it.

This low-cost index ETF offers you exposure to the entire S&P 500 index at one of the lowest expense ratios (0.02%) I've ever seen.

Let's look at why SPYM could be a smart investment for anyone who's wary of tech stocks.

SPYM: Buy into the "great rotation" away from tech?

The State Street SPDR Portfolio S&P 500 ETF lets you buy all the stocks in the S&P 500, representing 80% of the U.S. market. This can help you diversify away from tech -- and might help you get in on a positive growth trend called the great rotation. Investors seem to be rotating money away from tech stocks and into other parts of the stock market, like small-cap and value stocks.

Image source: Getty Images.

One concern that some investors might have about the S&P 500 index in recent years is that it was too top-heavy with major tech names. Even by "diversifying" with the S&P 500, you still might have ended up with too much tech in your portfolio.

But if this "great rotation" trend continues, SPYM investors could benefit. Even if the biggest tech names go through a long-term correction, the rest of the S&P 500 could still gain. The fact that SPYM has outperformed the Nasdaq-100 index year to date is a good sign that the rest of the S&P 500 is staying resilient despite some turbulence in tech.

SPYM: 20 years of 10.7% average annual returns

Since it tracks the performance of the S&P 500, SPYM will deliver almost exactly the same returns as that index. For the past 10 years, SPYM has generated average annual returns (by net asset value) of 14.2%, and for the past 20 years since its inception in November 2025, the fund has delivered 10.7% average annual returns. That's well in line with the S&P 500 index's long-term average of 10% per year.

The top holdings in SPYM include major tech names like Nvidia (7.6% of the fund), Apple (6.5%), and Microsoft (4.7%). But the fund's holdings by sector are only 33.4% Information Technology stocks. Other top sectors include Financials (12.5%), Communication Services (10.6%), Consumer Discretionary (9.8%), and Healthcare (9.2%).

If you're feeling nervous about AI stocks or want to take some profits on tech stocks, now could be a good time to buy SPYM. This diversified, low-cost ETF ranks as a good buy for long-term investors.

Ben Gran has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Meta Platforms, Microsoft, Nvidia, and Tesla and is short shares of Apple. The Motley Fool has a disclosure policy.