4 Best Long-Term Performance Technology Sector ETFs 1.4

  • Asset Class: Technology Sector

  • Oldest ETF back tested: The Technology Select Sector SPDR® Fund (XLK)

  • Correlation to U.S. Markets: 0.85

  • Long-Term Performance: 7.97% CAGR

  • S&P 500 Performance: 7.56% CAGR

  • Back test timeframe: January 1999 – April 2021

  • Number of ETFs available in this asset class: 82

  • Number of ETFs in this asset class that are 10-years old or older: 21

XLK vs SPY: January 1999 – April 2021

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4 Best Long-Term Performance Technology Sector ETFs 1.3

  • Asset Class: Technology Sector

  • Oldest ETF back tested: The Technology Select Sector SPDR® Fund (XLK)

  • Long-Term Performance: 6.80% CAGR

  • S&P 500 Performance: 6.30% CAGR

  • Back test timeframe: January 1999 – June 2020

  • Number of ETFs available in this asset class: 70

  • Number of ETFs in this asset class that are 10-years old or older: 20

XLK vs SPY: January 1999 – June 2020

XLK vs SPY: December 22, 1998 – June 30, 2020

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Best Long-Term Performance Technology ETFs 1.2

Here is the 20+ year performance of the oldest available technology ETF, The Technology Select Sector SPDR® Fund (XLK).

XLK vs S&P 500 index fund: January 1999 – June 2019

Source: https://www.portfoliovisualizer.com/

XLK vs SPY: December 22, 1998 – July 21, 2019

Source: https://www.koyfin.com/home

There are 67 ETFs available in the Technology Sector, 19 of these have inception dates prior to July 21, 2009. Let’s see how they rank.

Source: https://www.morningstar.com/

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FDN: Great Fund, But Random Index

Summary
  • FDN has easily outperformed both the S&P 500 and the NASDAQ.
  • The index is composed of 40 companies that get a majority of their revenue from “the Internet”.
  • Looking at the holdings, the rules for inclusion appear a bit perplexing with some prominent stocks not included.
  • However, the loose rules mean the index is well diversified for being focused on just one sector.

Read the full article at Seeking Alpha right here: https://seekingalpha.com/article/4267493-fdn-great-fund-random-index

 

Best Long-Term Performance Technology ETFs 1.1

How can a value investor participate in the growth stocks found in most Technology Sector ETFs? Wait! That’s right, wait for a sale. The oldest ETF in this sector is the Technology Select Sector SPDR® Fund (XLK). Unfortunately, history has not been kind to this sector ETF due to its’ inception date being near the eve of the DOT COM Market Crash. As you will see in the following chart, XLK has trailed an S&P 500 index fund by 0.81 CAGR with nearly double the volatility. That’s not what most long-term value investors are looking to add to their portfolio. But, there is a way; and that way is waiting. Wait for a significant drop in this sector and then start a position in your chosen Technology fund. What is significant? For me, that’s about a 10% decline, or more. Personally, I’m in no hurry to own a technology fund, but when this sector has a steep decline, I will begin accumulating shares of my chosen tech fund.

XLK vs S&P500: January 1999 – August 2018

Source: https://www.portfoliovisualizer.com/

Continue reading “Best Long-Term Performance Technology ETFs 1.1”