ETF Trends
ETF Trends

The nation’s ambitious “Smart Grid” program is in its incipient stages but the potential windfall for technology giants, along with technology exchange traded funds (ETFs), could be great.

Cisco Systems (Nasdaq: CSCO), IBM (NYSE: IBM), AT&T (NYSE: T), Intel (Nasdaq: INTC) and many others are all involved in a grand modernization plan for America’s “Smart Grid,” writes David Fessler for Investment U.

The National Institute of Standards (NIST) recently prepared the standards that the Commerce Department wants implemented for the electrical power grid. The plan details the integration and connection of smart meters, including data sharing on energy usage among utilities and cyber-security standards.

NIST requires internet-protocol (IP) technology in systems connected to the “Smart Grid.” This is good news for Cisco, a leader in IP technology. One potential problem with IP technology, however, is the vulnerability to hacking.

The Obama administration has earmarked $4.5 billion for the “Smart Grid” project and the beneficiaries include Cisco, IBM, AT&T and others.

  • Technology Select Sector SPDR (NYSEArca: XLK): up 33.1% year-to-date; T is 8.1%, CSCO is 6.6%, IBM is 8.6%, INTC is 4.6%

ETF XLK

  • iShares Dow Jones US Technology (NYSEArca: IYW): up 43.4% year-to-date; IBM is 9.1%, CSCO is 7.3%, INTC is 6.5%

ETF IYW

For more information on the technology sector, visit our technology category.

Max Chen contributed to this article.

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.