Technology ETFs Are Hot, But Will They Stay That Way?

Technology has always been a way for consumers to simplify and improve their lives through new innovation, and investing in the sector through exchange traded funds (ETFs) is a great way to gain exposure to these changes.

Technology continues to be a hot topic with investors for some of the following reasons:

• Consumers love and rely on technology, and they insist on name brands regardless of the economy; just look at sales of the newest iPhone, and we’re in a recession
• Moody’s recently upgraded the sector to “stable”
• NASDAQ (^IXIC) is outperforming other indexes year-to-date; it’s up 33.3% while the S&P 500 (^GSPC) is up 16.5% and the Dow is up 10.3%
• Semiconductor and PC demand are expected to stabilize this year and then surge in 2010

Nat Worden for The Wall Street Journal suggests taking a look at the SPDR Technology Select Sector (XLK), which is up 36% year-to-date.  XLK tracks 85 technology companies, has nearly $3.7 billion in assets and enables one to grab exposure to tech giants such as Microsoft (MSFT) and Apple (AAPL).

The iShares Dow Jones U.S. Technology Sector Index Fund (IYW) which is up 46.4% year-to-date and includes heavy exposure to MSFT and APPL, as well.

The PowerShares Dynamic Technology (PTF) which is up 30.7% year-to-date and includes exposure to MSFT, APPL and more.

The First Trust NASDAQ-100 Tech Index (QTEC) which is up 62.3% year-to-date and includes equal-weighted exposure to the technology stocks that make up the Nasdaq 100.

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