Lagging Tech Sector ETFs Need Apple Turnaround

Popular technology ETFs such as PowerShares QQQ (NasdaqGM: QQQ) are in the green for 2013 but are badly trailing the S&P 500 with Apple (NasdaqGS: AAPL) a headwind for the sector due to its outsized weighting in the funds’ tracking benchmarks.

Tech is the worst-performing sector this year as investors shy away from cyclicals to favor defensive sectors such as consumer staples, utilities and health care.

However, Apple could help get tech ETFs back on track. The market bellwether’s shares have bounced the past week after dipping below $400. Apple shares are still off about 19% so far this year.

Apple is the largest stock in Technology Select Sector SPDR (NYSEArca: XLK) at 13.4% of the portfolio. The tech ETF is up 6.1% year to date, compared with a gain of 12.5% for the S&P 500, according to Morningstar.

Bargain hunters could also lift the sector since U.S. technology stocks as a group have fallen to their cheapest valuations in at least seven years, according to Bloomberg News.