These ETFs offer software-industry exposure

Article Excerpt

Investing in the technology industry can be hugely profitable. However, companies face tough competition and the industry’s winners can quickly lose out to rivals with newer innovations. Tech stocks can also be very volatile—and negative news can throw them into steep declines. Well-diversified ETFs can help cut that risk. Here are three ETFs that aim to benefit from companies providing products and services to the software industry (see the supplement on page 10 for more information). SPDR S&P SOFTWARE & SERVICES ETF $78.82 (New York symbol XSW; TSINetwork ETF Rating: Aggressive; Market cap: $128.7 million) invests in U.S.-listed computer software companies. The ETF aims to track the S&P Software and Services Select Index. Stocks have to meet certain size and liquidity requirements and are equal weighted in the portfolio. In general, we don’t recommend equal-weight funds. They can incur periodic charges to rebalance their holdings; they can also cut your return by reducing the contribution of their top performers if those stocks soar. Still, equal weighting…

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