Technology ETFs Rising on the Sly

After seven years of hibernation, technology stocks and exchange traded funds (ETFs) have been making a comeback on the sly. The tech-loaded Nasdaq-100, which practically collapsed in the early turn of the century, has regained its health, as evident by the performance of the ETF that tracks it: PowerShares QQQ Trust (QQQQ). Currently, QQQQ is up 19.2% year-to-date, and its expense ratio is 0.2%. ETFGuide reports that the Nasdaq-100 includes the 100 largest domestic and international non-financial companies listed on the Nasdaq stock market.

Technology Select Sector SPDR (XLK) also is up 16.8% year-to-date. Its performance makes it one of the best performing industry sectors within the S&P 500. Top holdings in XLK include Apple (AAPL), IBM (IBM), Intel (INTC), Microsoft (MSFT) and Google (GOOG), and the expense ratio is 0.23%. For more narrowly-focused areas of technology, investors can consider these ETFs with their year-to-date performance:

• First Trust Dow Jones Internet Index (FDN) – up 15.0%
• SPDR S&P Semiconductor (XSD) – up 12.5%
• iShares S&P GSTI Networking (IGN) – up 11.7%
• iShares S&P GSTI Semiconductor (IGW) – up 11.2%
• iShares S&P GSTI Software (IGV) – up 10.7%

For full disclosure, some of Tom Lydon’s clients own QQQQ.