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From the roughly 35 commonly traded technology-related EFTs we have selected 4 of the best as a means for capitalizing on the latest trends in the industry. All of these ETFs track indices based on popular providers (such as Barclays, MSCI, Russell, S&P and Dow Jones). Some of these ETFs are drawn from "enhanced" indices, which are designed to outperform their counterparts through fine-tuned management and a more active selection process. A final point is that many of these indices are "weighted," which will make some component stocks take on a greater level of importance, relative to the other constituent stocks within the ETF.

Our criteria for preferred ETF choices requires minimal fee structures, consistent performance over long-term time frames, portfolio suitability, high liquidity levels, and each choice must be a linked index that is well established in the industry. A simple technical chart analysis is also used to determine where prices are relative to their historical performance as a means for determining value using price activity itself.

In recent years, the technology sectors have commanded a greater level of focus from investors and this trend is likely to continue both in the U.S. and throughout the world. These EFT choices, however, will focus on the U.S. as recent headlines (i.e. the Facebook IPO) have brought attention into this area of the industry. The following list shows ETF selections that are poised to take advantage of these recent trends and offer investors a source of improved returns over longer-term time frames.

We start the list with the First Trust Technology ETF (NASDAQ:QTEC). This EFT tracks the tech sector in the NASDAQ 100, and is an equally weighted fund launched in mid-2006. The QTEC expense ratio is 0.6% with an annual dividend yield of 0.33% and a year-to-date return of 11.9%. One advantage of the QTEC ETF is its diversification, as roughly 30% of its component stocks come from non-technology sectors.

The component stocks include Sandisk (NASDAQ:SNDK), Intel (NASDAQ:INTL), Cisco (NASDAQ:CSCO), Seagate Technology (NASDAQ:STX), F5 Networks (NASDAQ:FFIV), Akamai Technologies (NASDAQ:AKAM), Citrix Systems (NASDAQ:CTXS), VeriSign (NASDAQ:VRSN) and Autodesk (NASDAQ:ADSK). Looking at the charts, we can see that QTEC is trading near its all-time highs, but that prices remain above its 12-month moving average, which indicates that momentum is still positive, and this supports the fundamental arguments for entering into new long positions at current levels.

Next, we look at the SPDR Technology ETF (NYSEARCA:XLK), which follows the companies in the S&P 500 involved in technology and its sub-sectors. This fund has a longer history, as it was founded in 1998 and shows an expense ratio of 0.2%. Total assets under management (AUM) are seen at $8.2 billion and the ETF provides an annual dividend yield of 1.5%. Year-to-date return is 7.2%. Apple (NASDAQ:AAPL), IBM, Microsoft (NASDAQ:MSFT), AT&T (NYSE:T), Google (NASDAQ:GOOG), Verizon (NYSE:VZ), Oracle (NYSE:ORCL), Intel (INTL), Qualcomm (NASDAQ:QCOM), and Cisco (CSCO) make up the index. Technically, this ETF has recently broken above its all-time highs, which is a very bullish breakout signal and also remains above its 12-month moving average, so the index looks to have much further to run.

The Vanguard Information Technology ETF (NYSEARCA:VGT) is next, which is comprised of companies with high levels of brand recognition, and was started in 2004. The VGT expense ratio comes in at 0.2%, with total assets of $2 billion. The early dividend yield is 0.8% and the year-to-date return is currently at 9.2%. The companies chosen mirror the XLK fund closely, but add Hewlett-Packard (NYSE:HP) and Visa (NYSE:V) to the mix. Technically, prices have also broken above previous all-time highs, so momentum is clearly in the bullish camp for the index.

Finally, we select the iShares Dow Jones Technology ETF (NYSEARCA:IYW), which has been around since 2000, and shows total assets of $1.3 billion. The expense ratio comes in at 0.5% and the yearly dividend yield is 0.6%. Year-to-date return is currently at 9.5% and it includes many of the previously mentioned tech heavyweights. One addition is EMC Corp. (NYSE:EMC), which is weighted at 2.1% of the fund. Technically, new monthly highs are supported by neutral momentum readings, which suggest that a top has not yet formed for the ETF.

Source: 4 Tech ETFs Likely To Outperform In 2012