+ 0.81
+ 0.58%
+ 0.81
+ 0.49%

Small Can Work With Tech ETFs

September 27, 2016 2:42 pm
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More

When it comes to exchange-traded funds tracking the technology sector, the largest sector weight in the S&P 500, the funds that command the most attention are large-cap products heavy on familiar stocks such as Apple Inc. (NASDAQ: AAPL) and Microsoft Corporation (NASDAQ: MSFT).

However, as is the case with broader small-cap funds, a small-cap technology ETF can help risk-tolerant investors bolster returns. That is what the PowerShares S&P SmlCp Inftn Thgy Pfo (NASDAQ: PSCT) is doing this year. PSCT is seen as the small-cap answer to the popular Technology SPDR (ETF) (NYSE: XLK).

Great Things Come In Little Packages

The PowerShares offering is not a fresh face. Now more than six years old, PSCT has a more than adequate track record investors can use to assess the fund. Additionally, this is not a flash in the pan ETF. PSCT, which holds nearly 100 stocks, is home to nearly $481 million in assets under management.

Related Link: Evaluating A Pair Of Multi-Factor ETfs

PSCT is up more than 20 percent year compared to a gain of 11.8 percent for XLK and some analysts believe small-cap tech names are poised to keep that out-performance going. As Benzinga reported at the end of August, Turning Point argued small-cap tech stocks are well-positioned to continue to outperform the rest of the tech sector.

So far this year, the Russell 2000 TECH Index is up 13 percent, more than double the 6 percent gain of the S&P 500. Since crude oil bottomed on February 11, the Russell 2000 TECH is up 38 percent, while the NDX, TPA BIGTECH, Russell 200 and Russell 1000 TECH indices are up 20, 28, 29 and 24 percent, respectively.

Young, But Effective

Since coming to market, PSCT has topped the S&P SmallCap 600 Index by nearly 200 basis points, according to PowerShares data

PSCT tracks the S&P SmallCap 600 Capped Information Technology Index, which holds companies “engaged in the business of providing information technology-related products and services, including computer hardware and software, Internet, electronics and semiconductors and communication technologies,” according to PowerShares.

Nearly 28 percent of PSCT's lineup is allocated to electronic equipment and components makers with another 20.8 percent devoted to software companies. Semiconductor and IT services providers combine for over 29 percent of the ETF's weight.

PSCT has added nearly $56 million in new assets over the past month, a healthy percentage of its current assets under management tally and a total exceeded by just four other PowerShares ETFs.

Full ratings data available on Benzinga Pro.

Do you have ideas for articles/interviews you’d like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!

Related Articles

The QQQ, SPY And DIA All Fell Today. Here's Why.

U.S. indices traded lower Monday amid weakness in tech stocks and potential profit-taking in financials. read more

Here's Why Sunrun, Apple And Amazon Are Moving

Analysts and brokerage firms often use ratings when they issue stock recommendations to stock traders. Analysts arrive at stock ratings by researching public financial statements, communicating with executives and customers and following industry trends. Here are the latest analyst ratings and updates for Sunrun, Apple and Amazon. read more

What's Going On With Dogecoin, Bitcoin, IDEX Stock And UAL Stock?

Meme cryptocurrency Dogecoin (CRYPTO: DOGE) ran up nearly 80% in a 24-hour period and is trading above the psychologically important 10-cent mark. See also: How to Buy Dogecoin (DOGE) read more

Benzinga's Bulls And Bears Of The Week: Apple, Chevron, GM, GE, Peloton And More

Benzinga has examined the prospects for many investor favorite stocks over the past week. The past week's bullish calls included the iPhone maker, Google's parent and an automotive leader. read more