Due in part to those higher turnover rates, the mutual funds have average expenses of 0.85%, but the expense ratios on XLK and VGT are just 0.18% and 0.14% per year.
For investors looking to reduce volatility, the ETFs also come out on top. XLK and VGT have an average three-year standard deviation of 13.4% compared to 16.9% for the mutual funds, according to S&P Capital IQ.
The research firm has four-star ratings on Apple (NasdaqGM: AAPL) and Dow component International Business Machines (NYSE: IBM). Along with Google and Microsoft, those stocks combine for 40% of XLK’s weight. XLK and VGT are both rated overweight by S&P Capital IQ. [ETFs for 2013’s Top Tech Stocks]
Technology Select Sector SPDR
Tom Lydon’s clients own shares of QQQ, Apple, Google and Microsoft.