The PowerShares Dynamic Hardware and Consumer Electronics (PHW) exchange traded fund (ETF) follows the Hardware & Consumer Electronics Intellidex Index. The index evaluates companies based on a variety of criteria, such as fundamental growth, stock valuation, investment timeliness and risk factors. Currently, it’s up 20.5% year-to-date.
The emphasis on quantitative factors as opposed to market share has really helped PHW, which was shown in PHW’s increase when Apple (AAPL) reported a 67% jump in quarterly earnings. Apple is PHW’s top holding at 6.2%. PHW’s other top holdings have done well recently too: Storage system providers EMC (EMC), the second-largest holding at 5.8%, and Garmin (GRMN), the third-largest holding at 5.3%, posted a year-to-date return of 71.1% or better.
In addition, global trends have helped PHW, especially increasing demand in growing economies of Asia, Eastern Europe, and Latin America, says Don Dion for Seeking Alpha. Last week’s third-quarter global sales of personal computers were up 15.5% over 2006 figures, with PHW’s fifth-largest holding Hewlett-Packard (HPQ) topping the list with a better-than-average sales growth rate. PHW’s gains and its global growth in technology make it a potential niche fit for a diversified portfolio.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.