A few ETFs, such as the iShares S&P Global Technology fund (IXN) and the SPDR International Technology Sector fund (IPK), cover overseas companies. The iShares fund sticks closer to home, however, with more than 77% of its assets in U.S. companies, while the SPDR ETF has a more foreign flavor, holding 38% of its assets in Japanese companies and another 34% in European ones. But its small asset base of just $15 million and its average daily trading volume of 1,846 shares could make liquidity a problem.
More aggressive investors who don't want to take the plunge into individual small-cap or newly public technology securities might consider a few ETFs that offer a more diversified approach to those areas. In an April report, Zacks ETF analyst Eric Dutram highlighted two offerings that fall into this category.
The ETRACS Next Generation ETN fund (EIPO) follows a basket of firms involved in social networking, Internet software and Internet services. With about one-third of its assets in foreign companies, it also offers some international exposure. The Global X Social Media Index ETF fund (SOCL) is based on an index of companies involved in social networking, file sharing and other Web-based media applications. Small and mid-cap names make up about half of the portfolio. Because both these ETFs have very thin trading volume, their bid-ask spreads bear watching for anyone considering a purchase.