The PowerShares QQQ (NasdaqGM: QQQ), which tracks the tech heavy Nasdaq-100, has gained 17.6% over the past year while the Nasdaq Composite has broken past its dotcom-era highs.
Meanwhile, the Technology Select Sector SPDR (NYSEArca: XLK) rose 23.5%, iShares U.S. Technology ETF (NYSEArca: IYW) increased 23.9% and Vanguard Information Technology ETF (NYSEArca: VGT) advanced 24.2% over the past year.
The tech segment has quickly grown but valuations are not that nerve inducing just yet, with the technology sector trading at 22 times earnings, compared to the lofty 70 times P/E during the height of the 2000 dotcom boom, reports Ton Braithwaite for the Financial Times.
“There has been a renewed emphasis on profitability and not just growth,” John Kolz at Credit Suisse told the Financial Times. “Is that because growth was harder to come by? Or was that the right thing to do?”