Technology sector exchange traded funds are primed to break out from multi-year highs as tech giants like Apple (NasdaqGS: AAPL) lead the pack.
Technical analysts point out that the iShares U.S. Technology ETF (NYSEArca: IYW), which is up 1.0% Tuesday and 11.8% year-to-date, is testing highs from last fall and in spring of 2012, reports Victor Reklaitis for MarketWatch. Technical analysts Jonathan Krinsky, among others, also notes that the Dow Jones U.S. Technology Index making the same move.
Apple is bolstering the performance of the iShares ETF, gaining 8% so far this week after news on the next iPhone debut slated for Sept. 10.
IYW holds 16.8% in Apple, the largest weighting toward the stock of any other tech-related ETFs. For instance, Vanguard Information Technology ETF (NYSEArca: VGT) has 13.6% in Apple, Technology Select Sector SPDR Fund (NYSEArca: XLK) has 14.2% and PowerShares QQQ NasdaqGM: QQQ) holds 12.5%. [Some Tech ETFs for a Slice of Apple]
Morningstar analyst Robert Goldsborough views the IYW ETF as a “very high-quality portfolio–wide-moat and narrow-moat firms account for about 53% and 34% of the portfolio, respectively, meaning that Morningstar’s equity analysts believe that 87% of IYW’s assets are invested in firms with sustainable competitive advantages.”