Technology ETFs Are Hot; Will They Stay That Way?

September 17th at 6:00am by Tom Lydon

Technology has always been a way for consumers to simplify and improve their lives through new innovation, and investing in the sector through exchange traded funds (ETFs) is a great way to gain exposure to these changes.

Technology continues to be a hot topic with investors for some of the following reasons:

Consumers love and rely on technology, and they insist on name brands regardless of the economy; just look at sales of the newest iPhone, and we’re in a recession
Moody’s recently upgraded the sector to “stable”
NASDAQ is outperforming other indexes year-to-date; it’s up 33.3% while the S&P 500 is up 16.5% and the Dow is up 10.3%
Semiconductor and PC demand are expected to stabilize this year and then surge in 2010

Nat Worden for The Wall Street Journal suggests taking a look at the SPDR Technology Select Sector (NYSEArca: XLK),which is up 36% year-to-date. XLK tracks 85 technology companies, has nearly $3.7 billion in assets and enables one to grab exposure to tech giants such as Microsoft (Nasdaq: MSFT) and Apple (Nasdaq: APPL).

The iShares Dow Jones U.S. Technology Sector Index Fund (NYSEArca: IYW) which is up 46.4% year-to-date and includes heavy exposure to MSFT and APPL, as well.

The PowerShares Dynamic Technology (NYSEArca: PTF) which is up 30.7% year-to-date and includes exposure to MSFT, APPL and more.

The First Trust NASDAQ-100 Tech Index (NasdaqGM: QTEC) which is up 62.3% year-to-date and includes equal-weighted exposure to the technology stocks that make up the Nasdaq 100.