Based on 2015 estimates, the S&P 500 trades at 16.4 times earnings, but XLK is at 15.8 times this year’s expected earnings. On the basis of price to earnings growth and price to free cash flows, XLK is also slightly less expensive the S&P 500, according to AltaVista data.
Although stocks have disappointed to start 2015, giving XLK an immediate look merits consideration. XLK is usually the second-best sector SPDR in the first month of the year, trailing only the Health Care Select Sector SPDR (NYSEArca: XLV) in terms of January performance. [Sector ETF Ideas for January]
Technology Select Sector SPDR
Tom Lydon’s clients own shares of Apple and Facebook.