ETF Talk: Technology Goes Global

Doug Fabian

Doug Fabian is known for his expert knowledge of ETFs, bear funds and enhanced index funds to profit in any market climate.

Countries in Asia and Europe are joining the United States as drivers of technology innovation. Indeed, technology advances can come from developed and developing countries alike. For that reason, I want to bring to your attention a globally focused technology exchange-traded fund (ETF), the SPDR S&P International Technology Sector (IPK). The fund tracks non-U.S. technology companies.

If you want to invest in innovation taking place outside of the United States, IPK is worth considering. This non-diversified fund seeks investment results which, before fees and expenses, correspond generally to an index that tracks the technology sector in non-U.S. developed global markets.

While IPK has traded mostly flat this year, it had tremendous price gains in 2012 of more than 20%. And this ETF now offers a quarterly dividend, which results in a 1.20% yield. Asia and Europe both also are heavy users of technology, and China is moving in the same direction with its huge population. The Middle East, particularly economic engines such as Dubai, is increasing its use of technology and individual technological devices, too. The chart below offers a snapshot of IPK.

Most of IPK’s holdings, 85.94%, are in the technology sector, which is what you would expect from a technology ETF. The fund’s remaining holdings reside in sectors which play a supporting role, with a decently sized investment in industrials, 10.79%, and small allocations to consumer cyclical, 2.19%; communication services, 0.95%; and utilities, 0.14%. Among the fund’s individually held companies, not many are traded on U.S. exchanges, reflecting this fund’s focus on global technology companies. IPK’s top ten companies make up 48.93% of its total assets, and the lion’s share, 19.06%, of IPK’s total assets, is invested in Samsung. The remaining members of IPK’s top five companies held are SAP, 7.94%; Cannon Inc., 4.86%; Ericsson, 4.26%; and Hitachi, Ltd., 2.67%.

Exclusive  Find Low-Volatility Income in Asia Pacific

Although now may not be a great time to jump into IPK, as technology shares traditionally take a dip heading into the summer months, it is a good idea to keep an eye on this fund to educate yourself on the status of the sector outside the United States and potentially to invest when the fund resumes its rise. If you have a longer-term perspective, IPK could be part of your investment future.

Meanwhile, if you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my Successful Investing newsletter. As always, I am happy to answer any of your questions about ETFs, so do not hesitate to email me by clicking here. You may see your question answered in a future ETF Talk.

previous article

The fear trade is back on Wall Street. With the events of the past three days, it’s no wonder why.

PREMIUM SERVICES FOR INVESTORS

Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details

LEARN MORE HERE

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details

LEARN MORE HERE

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details

LEARN MORE HERE

Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

LEARN MORE HERE

Mike Turner

Mike Turner’s financial, mathematical, computer science and engineering background serves as the foundation for his disciplined, rules-based approach to trading. Mike’s three services include:

Product Details

LEARN MORE HERE

Hilary Kramer

Hilary Kramer is an investment analyst and portfolio manager with 30 years of experience on Wall Street. Since 2010, Hilary's financial publications have provided stock analysis and investment advice to her subscribers:

Product Details

LEARN MORE HERE

DividendInvestor.com

Used by financial advisors and individual investors all over the world, DividendInvestor.com is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

LEARN MORE HERE