Technology ETFs List
(click on symbol for data and articles)
Global Technology ETFs
iShares S&P Global Technology Sector Index Fund (IXN)
Broad US Technology ETFs
iShares Dow Jones U.S. Technology Sector Index Fund (IYW)
iShares Goldman Sachs Technology Index Fund (IGM)
Technology Select Sector SPDR Fund (XLK)
SPDR Morgan Stanley Technology ETF (MTK)
Vanguard Information Technology ETF (VGT)
First Trust NASDAQ-100-Technology Sector Index Fund (QTEC)
Equal Weight Technology Sector ETFs
Rydex S&P Equal Weight Technology ETF (RYT)
Quant Strategy Technology Sector ETFs
First Trust Technology AlphaDEX Fund (FXL)
PowerShares Dynamic Networking Portfolio (PXQ)
PowerShares Dynamic Semiconductors Portfolio (PSI)
PowerShares Dynamic Software Portfolio (PSJ)
PowerShares Dynamic Technology Sector Portfolio (PTF)
Leveraged Technology Sector ETFs
ProShares Ultra Technology ETF (ROM)
Inverse (Short) Technology Sector ETFs
ProShares UltraShort Technology (REW)
Technology Sub-Sector ETFs
Merrill Lynch Internet Architecture HOLDRs (IAH)
Internet and Technology Services ETFs
First Trust Dow Jones Internet Index Fund (FDN)
Merrill Lynch Internet HOLDRs (HHH)
Merrill Lynch Internet Infrastructure HOLDRs (IIH)
Merrill Lynch B2B Internet HOLDRs (BHH)
PowerShares Lux Nanotech Portfolio (PXN)
What Are They?
- These ETFs cover the technology sector, including software, semiconductors (chips), enterprise hardware and consumer gadgets. We've included Internet ETFs here as well, although they're a hybrid of media and technology.
- Sector ETFs come in four levels of granularity: (1) global, (2) US or international, (3) the main industry sub-groups that comprise the sector, and (4) narrower groups of companies within the sector.
- Specialty ETFs are also available for the technology sector, including leveraged, inverse, quant strategy, fundamental index and equal weighted ETFs. These ETFs are explained in their own sections of the ETF Finder; you can find the relevant links in Further Reading below. They usually use the primary US sector index.
Why & How To Use Them
- Sectors go in and out of style but tend to trend upwards at the same rate, so rebalancing between sectors can provide attractive opportunities. Long term investors may therefore want to build a diversified portfolio with enough granularity to provide opportunities for rebalancing using one of the sector ETF families listed in Primary US Sector ETFs or Global Sector ETFs. For more on rebalancing, see Further Reading below.
- If you believe that a particular sector will outperform, for example due to population aging or energy shortages, even as a long term investor you may want to overweight that sector. There are two ways to do that: (1) Assemple a diversified portfolio of broad ETFs (such as a total US market ETF, a broad foreign stock ETF and a broad bond ETF), and then add one or more of the ETFs on this page to increase exposure to this sector. (2) Build your portfolio using US sector ETFs or global sector ETFs and overweight one sector.
- Sector ETFs are popular with short term traders and momentum investors.
What to Look Out For
- Sector ETFs tend to be more concentrated than broad index ETFs. That means they can be more volatile, and can involve greater long term risk if the largest stocks in the ETF performs poorly.
- Sector ETFs tend to have higher expense ratios than broader index ETFs.
- Merrill Lynch HOLDRs are fixed baskets of stocks that become less and less representative of their sectors over time. The Internet HOLDRs ETF, for example, doesn't include Google.
- Narrow theme ETFs tend to have higher expenses and spreads than broader index ETFs. See Matt Hougan's Watch Expenses & Spreads For HealthShares, PowerShares, WisdomTree ETFs.
- It's generally agreed that expenses have a significant impact on long-run returns. However, Michael Krause argues that ETF Fees Are Largely Irrelevant and Roger Nusbaum agrees.
- Rebalancing is discussed in How to Make Money By Rebalancing and Rebalancing Rules. The case for and against sector ETFs for long term investors is outlined in Should You Use Sector ETFs?.
- For examples of sector-oriented commentary for short term traders and momentum investors, see articles by David Fry and Nick Perry.
- Read more about equal weight ETFs, fundamental sector ETFs, quant strategy ETFs, leveraged ETFs and inverse ETFs.
This page is part of The Seeking Alpha ETF Selector which sorts ETFs by type, highlights how to use them and what to look out for, and provides links to articles that discuss key issues for investors.