Go!
The pendulum in tech investments has swung from one extreme to another. But which of these ETFs has climbed +37% this year and rebounded about +50% from the 2003 bear market? 

A.) iShares S&P Global Technology (IXN)
B.) Goldman Sachs Networking Index Fund (IGN)
C.) PowerShares Dynamic Networking Fund (PXQ)
D.) First Trust Dow Jones Internet Index (FDN)
E.) ProShares Ultra Semiconductor (USD)

Published: September 24, 2009

The correct answer is      (A.) iShares S&P Global Technology

Investors have a fairly wide selection of tech-related ETFs to choose from. Most in this category track market-cap weighted benchmarks, and their top holdings tend to look very similar. Typically, you'll find industry heavyweights like Microsoft (Nasdaq MSFT), Apple (Nasdaq: AAPL), and Cisco Systems (Nasdaq: CSCO).

There's nothing wrong with these companies. They are all world-class businesses and you can make a strong case for owning each of them individually. But once you get further down the depth chart, that's where IXN starts to deviate from its peers. Other funds must stick to domestic indexes, while this global portfolio has the flexibility to search for opportunities abroad. About 70% of the $250 million portfolio is invested in the U.S., with the remainder spread throughout Japan, Taiwan, South Korea and several other countries.

Like most others, IXN was hard hit last year. But the fund held its ground under the circumstances and outperformed the category average by more than four percentage points. The portfolio has plenty of octane in up markets as well, climbing +37% so far this year. It also rebounded about +50% from the last bear market in 2003.

Since inception in 2001, shareholders haven't been on the hook for a single penny in capital gains taxes. That spotless tax efficiency means you get to keep more of what you earn.

That's why StreetAuthority editor Nathan Slaughter highlighted IXN in the latest issue of his ETF Authority newsletter. With a median market cap of $7 billion, the fund is an attractive choice for investors more comfortable holding established blue-chip companies, and its global index could provide an edge over more geographically restricted competitors. This isn't the only tech fund Nathan likes, however. Lots of funds are running their way up the curve these days. To learn the names of Nathan's other picks, and to learn more about The ETF Authority, please visit this link.

Want to answer more trivia questions? Visit our archives here!


 

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