ETF Talk: Can You Trust Technology?

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By Doug Fabian

If you are reading this report, you are using technology. More and more, technology is becoming part of our daily lives and ordinary activities. Just a few short years ago, computing tablet technology was considered extraordinary. Now, it is commonplace. Devices of all sorts are becoming increasingly connected, and the next big development beyond our current imaginations is just around the corner. How do you tap into the boundless potential of this sector? One way is by investing in the First Trust NASDAQ-100-Tech Index (QTEC).

This non-diversified exchange-traded fund (ETF) seeks results which, before fees and expenses, correspond generally to the performance of an index which is based on technology companies in the NASDAQ-100.

Following a solid rise in 2012, QTEC is up 7.5% so far this year. The fund offers a yield of 0.90%. Although it had a bit of a dip last November, QTEC has recovered nicely and looks to continue its growth as technology becomes more pervasive in society and in people’s lives.

 

QTEC’s holdings demonstrate a clear commitment to technology, since 100% of its holdings are in that sector. Its top 10 individually held companies comprise 25.45% of the ETF’s total assets, and they include such household technology names as Dell and Google. The top five of these are: Dell Inc. (DELL), 2.87%; Micron Technology, Inc. (MU), 2.85%; Symantec Corporation (SYMC), 2.71%; Applied Materials, Inc. (AMAT), 2.55%; and SanDisk Corporation (SNDK), 2.44%.

The technology sector is poised for tremendous growth in the near future, as currently hot technologies such as tablets and smartphones get even more popular and widely adopted. Also consider that newer technologies, such as speech recognition and 3-D printing, will become increasingly common in the years ahead. To tap these technology trends, now may prove to be a great time to invest in the sector’s ascent. QTEC is one of a number of technology ETF opportunities that are available for you to choose.

 

If you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my Successful Investingnewsletter. As always, I am happy to answer any of your questions about ETFs, so do not hesitate to email me by clicking here. You may see your question answered in a future ETF Talk.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , ETFs , Stocks , Technology

Referenced Stocks: AMAT , DELL , MU , QTEC , SNDK , SYMC

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