The year 2013 has been good for the equity markets so far even with high levels of volatility following the panic over the tapering talks. While most of the sectors have performed well this year, the technology sector remains stressed due to uncertainty surrounding some of the top tech players.
In fact, the SPDR S&P 500 (SPY) has posted year-to-date returns of around 14.7% and the Technology Select Sector SPDR Fund (XLK), which tracks the stock market performance of the technology segment in the U.S. equity market, is up by just about 8.7% (read: Tech ETFs Slump on Microsoft Earnings Miss).
The weakness in tech sector ETFs was due in large part to the sluggish performances this earnings season from the top players such as Google (GOOG), Microsoft (MSFT), International Business Machines (IBM), Hewlett-Packard (HPQ) and Intel Corp. (INTC).
This is because these firms are seeing weak overseas demand, overall reduction in global information technology spending, and a strong dollar just to name a few headwinds to global tech stocks.
While most large cap ETFs have recently shown weakness in their prices, some remained unperturbed by dull performances and are enjoying a surge in prices. Here, we have highlighted three broad tech ETFs that have less exposure to the big players and are the real winners in the current environment.
In fact, unlike large cap counterparts, these funds performed well with double digit returns and easily outpaced the SPY by wide margins in the year-to-date period.
PowerShares S&P SmallCap Information Technology ETF (PSCT)
Investors seeking higher returns in the tech space could find PSCT an intriguing choice. The fund provides exposure to 127 pint-sized securities by tracking the S&P SmallCap 600 Capped Information Technology Index.
The product manages an asset base of $160 million while volume is light, suggesting additional cost in the form of wide bid/ask spread beyond the expense ratio of 0.29%. In terms of holdings, the ETF is well spread across each security as none of them holds more than 2.75% of assets.
However, the fund has a tilt towards growth stocks, indicating that it will gain more when the market moves upward. The fund has returned nearly 24% year-to-date.
Guggenheim S&P Equal Weight Technology ETF (RYT)
This ETF tracks the S&P 500 Equal Weight Index Information Technology, holding 70 securities in the basket. The product seeks to follow equal allocation towards the entire spectrum of market capitalization levels, thereby minimizing concentration risk.(...)Click here to continue reading the original ETFDailyNews.com article: 3 Technology ETFs That Avoid The Big Tech NamesYou are viewing an abbreviated republication of ETF Daily News content. You can find full ETF Daily News articles on (www.etfdailynews.com)