US Technology (IYW): Future gains
"Technology has advanced enormously, compared with just ten years ago," says Doug Fabian, who looks to iShares Dow Jones US Technology (NYSE: IYW) in his Making Money.
"Just consider how much people rely on cell phones and use a growing number of tech-savvy applications. Such devices now let users check their emails, monitor the market and track sports scores virtually anytime.
"Even once bulky consumer electronic goods, such as televisions and desktop computers, are becoming thinner and more capable than ever. Investors have taken notice and are putting a heightened amount of their personal resources into technology funds.
"Fortunately, there are exchange-traded funds that allow investors to capture the benefit of technology's resurgence in the market. One ETF that has caught my interest is the iShares Dow Jones US Technology.
"This fund tracks some of the largest public companies in the United States that compose the Dow Jones U.S. Technology Index. The ETF holds large shares in Microsoft and Google, as well as other big technology companies, including Apple, Cisco and Hewlett-Packard.
"The fund consists almost entirely of two categories: technology hardware and equipment, 55.54%, and software and computer services, 44.18%.
"Through the end of August, the fund is 41.35% for the year, beating the S&P 500's 13.95% increase and the 28.50% gain in the technology-dominated NASDAQ Composite. The performance numbers show that technology stocks are leading the market's overall recovery.
"Indeed, large technology companies could become the 21st century's market bellwethers. If you like the outlook for technology, you may want to consider investing in a fund such as IYW that is positioned to rise along with the sector."
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