Invest in the Broad Information Technology Sector with This Fund

Technology stocks have been one of the hottest trends out there for a great number of years.

Investors in this sector have seen almost consistent, outsized returns for roughly the last 20 years. It is no wonder that the world of exchange-traded funds (ETFs) has come together to present investors with such a wide array of ways to invest in the sector. Fidelity MSCI Information Technology Index ETF (FTEC) is one contender in this expansive universe.

The index tracked by this fund is designed to capture the large-, mid- and small-cap segments of U.S. information technology stocks. Large-cap stocks are the most strongly represented, and the fund is fully invested in domestic companies.

Although there are some rules about diversification, in practice, the fund has a strong concentration in a few stocks, mainly Apple (NASDAQ: AAPL) and Microsoft (NASDAQ: MSFT), which together make up more than 35% of the fund’s portfolio. Over the course of the last year, the fund has performed characteristically well.

It is up 35%, slightly ahead of both the NASDAQ and the S&P 500. Its year-to-date results similarly have slightly outperformed those market indicators. The fund has a low expense ratio of 0.08% and more than $6 billion in assets under management. The fund also is quite liquid and easy to trade.

Chart courtesy of www.StockCharts.com

Top holdings for this fund include Apple Inc. (NASDAQ: AAPL), 20.16%; Microsoft Corp. (NASDAQ: MSFT), 16.87%; NVIDIA Corp. (NASDAQ: NVDA), 4.46%; Visa Inc. (NYSE: V), 2.98%; and PayPal Holdings (NASDAQ: PYPL), 2.53%. The top 10 holdings account for 57.5% of the fund’s assets.

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For investors looking for a way to invest in the information technology sector without paying high expense ratios, Fidelity MSCI Information Technology Index ETF (FTEC) may belong on your list of funds to research.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Intelligence Report, Successful Investing, the Bullseye Stock Trader, and The Deep Woods (formerly the Weekly ETF Report). His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.