While VGT offers leverage to a rebound in tech laggards, there is no guarantee such a rebound will materialize. Additionally, investors can consider different spins on the tech sector that sharply outpaced VGT this year.
For example, the Guggenheim S&P 500 Equal-Weight Technology ETF (NYSEArca: RYT) is up 29.2% year-to-date, indicating that the 130 basis points in added volatility over VGT that investors take on with RYT is worth the “risk.”
The PowerShares Dynamic Technology Sector Portfolio (NYSEArca: PTF) weighs its 60 components by factors such as price momentum, earnings momentum, quality, management action, and value. That recipe has worked to the tune of an almost 34% gain this year. Apple, IBM and Oracle do not reside in PTF.
Vanguard Information Technology ETF
Tom Lydon’s clients own shares of Apple.