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By: The ETF Professor

The technology sector, the largest sector weight in the S&P 500, has been a decent though not spectacular performer in 2013.

Including Thursday's gains, the Technology Select Sector SPDR (NYSEARCA:XLK) is up more than 10 percent this year, but investors could have done more than twice as well with the Health Care Select Sector SPDR (NYSEARCA:XLV), an ETF tracking a sector that is perceived to be far less volatile than tech.

Even the Consumer Staples Select Sector SPDR (NYSEARCA:XLP) has outpaced XLK by more than 800 basis points year-to-date. Tech's lethargy to this point does not mean the sector holds no promise going forward. The opposite may be true as improving earnings and an increasingly attractive dividend picture could buoy large-cap tech names.

Investors that already have large-cap tech exposure may want to consider adding some small-caps to their respective frays. The PowerShares S&P SmallCap Information Technology Portfolio (NASDAQ:PSCT) is the ETF with which to accomplish that objective.

While PSCT is dwarfed in size by large-cap tech ETFs such as XLK and the Vanguard Information Technology ETF (NYSEARCA:VGT), the PowerShares offering does have almost $147 million in assets under management, putting it comfortably above the $100 million threshold so many folks deem important.

More important than superficial statistics is what PSCT has been doing for investors this year. The ETF, which debuted just over three years ago as the small-cap answer to XLK, is up 17.2 percent in 2013.

That equals a significant gap of out-performance over large-cap tech ETFs indicating that the fund is benefiting from the absence of disappointing big-name tech stocks such as Apple (NASDAQ:AAPL) and International Business Machines (NYSE:IBM).

That said, PSCT is not littered with a slew of risky micro-cap names. The fund's 127 constituents have an average market value of $1.27 billion. Holdings include Microsemi (NASDAQ:MSCC) and Arris Enterprises (NASDAQ:ARRS), both of which earn four-star ratings from S&P Capital IQ. S&P Capital IQ has a Marketweight rating on PSCT.

Familiar names among PSCT's lineup include OpenTable (NASDAQ:OPEN), Take-Two Interactive (NASDAQ:TTWO) and Stamps.com (NASDAQ:STMP).

PSCT may not win any volume competitions with average daily turnover of less than 23,000 shares, but in 2012's 250 trading days and the first 124 days of this year, the mid-point of the fund's bid/ask spread traded noticeably, and that is a stretch, above the net asset value on just one occasion, according to PowerShares data.

Disclaimer: Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.

Source: Under The Hood: Going Small With A Tech ETF