The technology sector is shaping up as one of the best performing areas of the market in 2012. The exchange traded fund Technology Select Sector SPDR (NYSEArca: XLK) has risen 17.5% over the first quarter of this year.
The stellar rise of XLK can be attributed to the performance of Apple (NasdaqGS: AAPL) which has gained around 40% this year. The ETF holds Apple at 18.3% of assets, the top holding. Both the iPad and the iPhone are behind the company’s current success. [ETFs That Access High Price Stocks]
Matthew Hougan, President of ETF Analytics, says investors who are thinking about using exchange-traded funds to play the Apple boom should ask themselves what they are really buying into: Is it “The technology renaissance? The mobile device boom? Or Apple’s specific creativity, brand and ability to execute?” If the answer is one of the first two, ETFs are a good way to play it. If the answer is the last one, buy Apple stock, says Hougan. [Defensive ETFs for a Market Pullback]
Benjamin Shepherd for Global ETF Profits reports that semiconductors have also bolstered the technology sector. Recent floods have wiped out major semiconductor plants in certain emerging market countries, and at the same time, the demand for sophisticated electronics has created more of a need for semis. [Technology ETFs with Big Positions in Apple]
PC shipments are expected to grow by 4.5% this year, driven by the expected launch of Windows 8, while tablet computer production—think Apple’s iPad—is expected to explode this year by more than 75 %, reports Shepherd.