Connect with us
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.

archive

ETF Talk: Technology Goes Global

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.

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 IPKā??s holdings, 85.94%, are in the technology sector, which is what you would expect from a technology ETF. The fundā??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 fundā??s individually held companies, not many are traded on U.S. exchanges, reflecting this fundā??s focus on global technology companies. IPKā??s top ten companies make up 48.93% of its total assets, and the lionā??s share, 19.06%, of IPKā??s total assets, is invested in Samsung. The remaining members of IPKā??s top five companies held are SAP, 7.94%; Cannon Inc., 4.86%; Ericsson, 4.26%; and Hitachi, Ltd., 2.67%.

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.

Newsletter Signup.

Sign up to the Human Events newsletter

Written By

Doug Fabian is the editor of Successful Investing and High Monthly Income, and is the host of the syndicated radio show, "Doug Fabian's Wealth Strategies." Taking over the reigns from his dad, Dick Fabian, back in 1992, Doug has continued to uphold the reputation of the newsletter as the #1 risk-adjusted market timer as ranked by Hulbertā??s Investment Digest. For more than 30 years, Successful Investing (formerly the Telephone Switch Newsletter) has produced double-digit annual gains. Doug has become known for his expert knowledge and timely use of innovative tools like Exchange Traded Funds, bear funds and Enhanced Index funds to profit in any market climate.

Click to comment

Leave a Reply

Your email address will not be published.

Advertisement
Advertisement

TRENDING NOW:

YouTube Won’t Let You Watch Lauren Southernā€™s ‘Borderless’

FOREIGN AFFAIRS

DONKTUM: Restricting the Range of Consciousness.

CULTURE

Lauren Southern’s Borderless Deleted By YouTube. ENOUGH.

U.S. POLITICS

Farage: ‘No No to BoJo’.

FOREIGN AFFAIRS

Connect
Newsletter Signup.

Sign up to the Human Events newsletter