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Technology ETFs Lead The Charge in 2018

This article was originally published on ETFTrends.com.

After stumbling earlier this year, the S&P 500 is back on track towards its record highs, with technology stocks and tech ETFs leading the charge.

The technology sector is this year's best performer of the 11 segments in the S&P 500 index, gaining 14%, compared to the 4.9% rise in broader U.S. benchmark.

Among the largest broad technology sector-related ETFs, the Technology Select Sector SPDR Fund (XLK) increased 12.4%, Vanguard Information Technology ETF (VGT) advanced 14.3% and iShares U.S. Technology ETF (IYW) added 13.8% year-to-date.

The three popular technology ETFs track widely observed, market cap-weighted tech indices. XLK focuses on the Technology Select Sector Index, which is made up of S&P 500 information technology companies. VGT tracks the MSCI US Investable Market Information Technology 25/50 Transition Index, which will act as the temporary index as the index provider reconstitutes its telecommunication sector to adapt to the changing technological environment. IYW takes its tech components from the Dow Jones U.S. Technology Index.

The Best Performing Tech ETFs of 2018

Among the best performing tech-related ETFs so far this year, the SPDR S&P Internet ETF (XWEB) , which is comprised of internet names taken from the S&P Total Market Index, jumped 30.4% and SPDR FactSet Innovative Technology ETF (XITK) , which tracks innovative companies in the tech and media sectors, surged 26.3% year-to-date.

XWEB focuses solely on internet names, including a large tilt toward internet software and services, along with a smaller focus on internet retailers. The ETF includes many well-known companies like LinkedIn, Twitter and Zillow, among others.

XITK's underling index selects firms with the highest revenue growth and believes these companies are in cutting edge research, innovative produce and service development, and disruptive business models. Components are also equally weighted.

Since the S&P 500 closed at its 2018 low on February 8, nine of every 10 technology stocks in the index have increased in price. While most S&P 500 components have strengthened since the market entered the correction,148 company stocks have declined.

For more information on the tech segment, visit our technology category.