Tag: IGM

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5 Best Technology Sector ETFs to Own Long-Term: SMH vs VGT vs XLK vs IYW vs IGM 1.6

  • Asset Class: Technology Sector

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

  • Correlation to U.S. Markets: 0.86

  • Long-Term Performance: 7.70% CAGR

  • S&P 500 Performance: 7.03% CAGR

  • Back test timeframe: January 1999 – April 2023

  • Number of ETFs available in this asset class: 122

  • Number of ETFs in this asset class that are 10-years old or older: 26

XLK vs SPY: January 1999 – April 2023

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4 Best Technology Sector ETFs to Own Long-Term 1.5

  • 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: 7.70% CAGR

  • S&P 500 Performance: 7.22% CAGR

  • Back test timeframe: January 1999 – April 2022

  • Number of ETFs available in this asset class: 113

  • Number of ETFs in this asset class that are 10-years old or older: 25

XLK vs SPY: January 1999 – April 2022

XLK vs SPY: December 22, 1998 – May 13, 2022

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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/

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