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 (NASDAQ:MSFT) and Apple (NASDAQ: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 (NASDAQ: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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