Information Technology Sector: Overview and Funds

The information technology (IT) sector is comprised of companies that produce software, hardware or semiconductor equipment, or companies that provide internet or related services. The three major industry groups within the IT sector are software and services, technology hardware and equipment and semiconductors and semiconductor equipment. These three industry groups are further divided into industries and sub-industries. Companies are aligned to a specific sub-industry that best describes their core or most profitable business. In this guide, we will cover the various industries and sub-industries that make up the three major industry groups within the IT sector.

Software and Services

The software and services industry group is made up of companies that provide internet services, as well as companies that provide software and IT services. Internet services include companies that provide online databases or interactive services, such as search engines or social networks. IT services includes companies that provide IT consulting or data processing services to other companies. Finally, software consists of any sort of software for business or consumer use, ranging from enterprise software and systems software to video games.

IndustrySub-IndustryDescription
Internet Software & Services Internet Software & Services Companies that develop and market internet software or provide internet services, including online databases or interactive services. This also includes companies whose revenue mainly comes from online advertising.
IT Services IT Consulting & Other Services Companies that provide IT services or systems integration services, including IT consulting and information management.
Data Processing & Outsourced Services Companies that provide data processing or outsourcing services, including back-office automation services.
Software Application Software Companies that develop and produce software for business or consumer use, including enterprise applications and technical software. This excludes home entertainment and educational software.
Systems Software Companies that develop and produce database management software and systems.
Home Entertainment Software Companies that produce home entertainment software, such as video games, and educational software for consumer use.

Examples of companies that provide software and services include Google, eBay, Facebook, Accenture, PayPal, Adobe, Microsoft and Electronic Arts (EA).

Technology Hardware and Equipment

Technology hardware and equipment is broken down into three industries: communications equipment, technology hardware, storage and peripherals and electronic equipment, instruments and components. Communications equipment includes routers, telephones and switchboards. Technology hardware, storage and peripherals includes computers, printers and cell phones. Electronic equipment, instruments and components include companies that make equipment like barcode scanners, transformers and security systems, as well as companies that are distributors or Original Equipment Manufacturers (OEM). An OEM is a company that makes parts or components that are used in another company’s end product. For example, many Dell computers use Intel processors and have Windows pre-installed--Intel and Microsoft could be considered OEMs for Dell.

IndustrySub-IndustryDescription
Communications Equipment Communications Equipment Companies that produce communication equipment, including local area networks (LAN), routers, telephones, and switchboards. This excludes companies that make cell phones.
Technology Hardware, Storage & Peripherals Technology Hardware, Storage & Peripherals Companies that produce cell phones, PCs, servers, electronic computer products and peripherals. This also includes motherboards, audio and video cards, monitors, keyboards and printers.
Electronic Equipment, Instruments & Components Electronic Equipment & Instruments  Companies that produce electronic equipment, including scanner/barcode products, lasers, point-of-sale machines/cash registers and security systems.
Electronic Components Companies that produce electronic components, including transformers, electronic capacitors and resistors, electronic coils and connection devices.
Electronic Manufacturing Services Companies that produce electronic equipment as an Original Equipment Manufacturer (OEM). An OEM is a company that makes a part or component that is used in another company's end product.
Technology Distributors Companies that distribute hardware and technology equipment to other companies, but do not produce this equipment or sell it to consumers. This includes companies that distribute communications equipment, computers and semiconductors.

Examples of companies that produce technology hardware and equipment include Apple, HP, Dell, Motorola, Cisco Systems, SanDisk and Western Digital.

Semiconductors and Semiconductor Equipment

Semiconductors are substances that can conduct electricity under some conditions, but not others, making them ideal for controlling electrical currents. Silicon is a material that is frequently used as a semiconductor. This industry group includes both companies that make semiconductors and companies that make peripheral equipment for semiconductors.

IndustrySub-IndustryDescription
Semiconductors & Semiconductor Equipment Semiconductor Equipment  Companies that produce semiconductor equipment, including manufacturing raw materials and creating equipment used in the solar power industry.
Semiconductors Companies that create semiconductors, including companies that make solar modules and cells.

Examples of companies that make semiconductors and related equipment include Intel, Microchip Technology, Nvidia, QUALCOMM and Texas Instruments.

Information Technology Sector ETFs and Mutual Funds

Listed below are over 200 ETFs, index funds and mutual funds that track the information technology sector or specific industries, such as semiconductors or internet software. The expense fees of the funds below range from 0.10% to 2.80%.

Name
Symbol
Expense Ratio
Vanguard Information Technology ETF VGT 0.10%
Vanguard Information Technology Index Fund Admiral Shares VITAX 0.10%
Fidelity MSCI Information Tech ETF FTEC 0.12%
Technology Select Sector SPDR XLK 0.14%
PowerShares S&P SmallCap Information Technology ETF PSCT 0.29%
SPDR Morgan Stanley Technology ETF MTK 0.35%
Market Vectors Semiconductor ETF SMH 0.35%
SPDR S&P Semiconductor ETF XSD 0.35%
SPDR S&P Software & Services ETF XSW 0.35%
Guggenheim S&P 500 Equal Weight Technology ETF RYT 0.40%
SPDR S&P International Technology Sector ETF IPK 0.40%
Nationwide Ziegler NYSEArcaTech100 Fund Class I NWJEX 0.42%
iShares U.S. Technology ETF IYW 0.43%
SPDR FactSet Innovative Technology ETF XITK 0.45%
iShares North American Tech ETF IGM 0.47%
iShares Global Tech ETF IXN 0.47%
iShares Exponential Technologies ETF XT 0.47%
iShares North American Tech-Software ETF IGV 0.47%
iShares PHLX Semiconductor ETF SOXX 0.47%
iShares North American Tech-Multimedia Networking ETF IGN 0.47%
WisdomTree Japan Hedged Tech, Media and Telecom ETF DXJT 0.48%
First Trust NASDAQ Technology Dividend ETF TDIV 0.50%
John Hancock Multifactor Technology ETF JHMT 0.50%
First Trust Dow Jones Internet ETF FDN 0.54%
Nationwide Ziegler NYSEArcaTech100 Institutional Service Class NWJFX 0.56%
First Trust ISE Cloud Computing ETF SKYY 0.60%
First Trust NASDAQ-100-Technology Sector ETF QTEC 0.60%
PowerSHares NASDAQ Internet ETF PNQI 0.60%
PowerShares DWA Technology Momentum ETF PTF 0.60%
First Trust NASDAQ Cybersecurity ETF CIBR 0.60%
First Trust Technology AlphaDEX ETF FXL 0.63%
PowerShares Dynamic Software ETF PSJ 0.63%
PowerShares Dynamic Semiconductors ETF PSI 0.63%
PowerShares Dynamic Networking ETF PXQ 0.63%
Global X Social Media ETF SOCL 0.65%
Global X NASDAQ China Technology ETF QQQC 0.65%
Guggenheim China Technology ETF CQQQ 0.70%
KraneShares CSI China Internet ETF KWEB 0.71%
Fidelity Advisor® Technology Fund Class I FATIX 0.74%
PureFunds ISE Cyber Security ETF HACK 0.75%
PureFunds ISE Mobile Payments ETF IPAY 0.75%
PureFunds ISE Big Data ETF BDAT 0.75%
BlueStar TA-BIGITech Israel Technology ETF ITEQ 0.75%
Janus Aspen Global Technology Institutional Class JGLTX 0.76%
Deutsche Science and Technology Institutional Class KTCIX 0.76%
Fidelity® Select Software & IT Services Portfolio FSCSX 0.77%
Fidelity® Select Electronics FSELX 0.77%
Fidelity® Select Technology FSPTX 0.78%
Janus Global Technology Fund Class I JATIX 0.79%
Nationwide Ziegler NYSEArcaTech100 Fund Class A NWJCX 0.79%
Fidelity® Select Computers FDCPX 0.80%
Direxion Daily Cyber Security and IT Bear 2X ETF HAKD 0.81%
Direxion Daily Cyber Security and IT Bull 2X ETF HAKK 0.81%
Fidelity® Select IT Services FBSOX 0.81%
Ivy Science and Technology Fund Class R6 ISTNX 0.82%
T. Rowe Price Science & Technology PRSCX 0.84%
Deutsche Science and Technology Fund Class S KTCSX 0.85%
Emerging Markets Internet & eCommerce ETF EMQQ 0.86%
Invesco Technology Fund Class R5 FTPIX 0.87%
Fidelity® Select Communications Equipment Portfolio FSDCX 0.89%
Janus Global Technology Fund Class D JNGTX 0.90%
Columbia Seligman Comms & Info Fund Class I CSFIX 0.91%
T. Rowe Price Global Technology PRGTX 0.91%
MFS Technology Fund Class R5 MTCLX 0.92%
Janus Global Technology Fund Class T JAGTX 0.93%
ProShares Ultra Technology ETF ROM 0.95%
Robo Global Robotics & Automation ETF ROBO 0.95%
ProShares Ultra Semiconductors ETF USD 0.95%
ARK Web x.0 ETF ARKW 0.95%
ARK Innovation ETF ARKK 0.95%
ProShares UltraShort Technology REW 0.95%
ProShares UltraShort Semiconductors SSG 0.95%
Columbia Global Technology Growth Fund Class Y CGTUX 0.95%
Nationwide Bailard Tech&Sci Fund Class M NWHQX 0.95%
Nationwide Bailard Tech&Sci Institutional Class NWHTX 0.95%
Fidelity Advisor® Electronics Fund Class I FELIX 0.96%
Direxion Daily Semiconductor Bull 3X ETF SOXL 0.97%
Direxion Daily Semiconductor Bear 3X ETF SOXS 0.97%
Ivy Science & Technology Fund Class I ISTIX 0.97%
Matthews Asia Science and Tech Institutional Class MITEX 0.97%
Columbia Seligman Communications and Information Fund Class R5 SCMIX 0.97%
VALIC Company I Science & Technology VCSTX 0.97%
Direxion Daily Technology Bear 3X ETF TECS 0.98%
Columbia Global Technology Growth Fund Class I CONIX 0.98%
Deutsche Science and Technology Fund Class A KTCAX 0.98%
Direxion Daily Technology Bull 3X ETF TECL 0.99%
Columbia Seligman Global Technology Fund Class I CSYIX 0.99%
Waddell & Reed Science & Technology Fund Class Y USTFX 0.99%
Columbia Global Technology Growth Fund Class R5 CTHRX 1.00%
Putnam Global Technology Fund Class Y PGTYX 1.01%
Dreyfus Technology Growth Fund Class I DGVRX 1.02%
MFS Technology Fund Class I MTCIX 1.02%
MFS Technology Fund Class R4 MTCJX 1.02%
Columbia Seligman Global Technology Fund Class R5 SGTTX 1.02%
Nationwide Bailard Tech&Sci Institutional Service Class NWHUX 1.03%
Henderson Global Technology Fund Class R6 HFGRX 1.04%
T. Rowe Price Science & Technology Fund Advisor Class PASTX 1.06%
Fidelity Advisor® Technology Fund Class A FADTX 1.08%
Goldman Sachs Technology Opportunities Institutional Class GITIX 1.08%
Janus Global Technology Fund Class A JATAX 1.08%
Columbia Seligman Comms & Info Fund Class Z CCIZX 1.10%
Henderson Global Technology Fund Class I HFGIX 1.11%
Red Oak Technology Select ROGSX 1.11%
Columbia Seligman Communications and Information Fund Class R4 SCIOX 1.11%
Fidelity Advisor® Communications Equip Fund Class I FDMIX 1.14%
Columbia Global Technology Growth Fund Class Z CMTFX 1.15%
Columbia Global Technology Growth Fund Class R4 CTYRX 1.15%
Invesco Technology Fund Class Y ITYYX 1.15%
Columbia Seligman Global Technology Fund Class R4 CCHRX 1.17%
Columbia Seligman Global Technology Fund Class Z CSGZX 1.17%
Matthews Asia Science and Tech Investor Class MATFX 1.18%
USAA Science & Technology USSCX 1.18%
Janus Global Technology Fund Class S JATSX 1.20%
Ivy Science & Technology Fund Class Y WSTYX 1.22%
Goldman Sachs Technology Opportunities Fund Class IR GISTX 1.23%
RS Technology Fund Class Y RIFYX 1.24%
Columbia Seligman Communications and Information Fund Class K SCIFX 1.24%
Waddell & Reed Science & Technology Fund Class A UNSCX 1.24%
Black Oak Emerging Technology BOGSX 1.25%
AllianzGI Technology Institutional Class DRGTX 1.26%
Northern Technology NTCHX 1.26%
Putnam Global Technology Fund Class A PGTAX 1.26%
Ivy Science & Technology Fund Class A WSTAX 1.26%
BlackRock Science & Technology Opportunities Institutional Shares BGSIX 1.27%
Fidelity Advisor® Electronics Fund Class A FELAX 1.27%
MFS Technology Fund Class A MTCAX 1.27%
MFS Technology Fund Class R3 MTCHX 1.27%
Nationwide Bailard Tech&Sci Fund Class A NWHOX 1.27%
Columbia Seligman Global Technology Fund Class K SGTSX 1.27%
Dreyfus Technology Growth Fund Class A DTGRX 1.28%
Invesco Technology Investor FTCHX 1.30%
Invesco Technology Sector Fund Class Y IFODX 1.33%
Fidelity Advisor® Technology Fund Class T FATEX 1.34%
Henderson Global Technology Fund Class A HFGAX 1.34%
Rydex Internet Investor Class RYIIX 1.35%
Rydex Electronics Investor Class RYSIX 1.35%
Rydex Technology Investor Class RYTIX 1.35%
Columbia Seligman Communications and Information Fund Class B SLMBX 1.35%
Columbia Seligman Communications and Information Fund Class A SLMCX 1.35%
Wells Fargo Specialized Technology Fund Class Admin WFTDX 1.35%
AllianzGI Technology Fund Class P ARTPX 1.36%
Fidelity Advisor® Communications Equip Fund Class A FDMAX 1.39%
Columbia Global Technology Growth Fund Class A CTCAX 1.40%
Invesco Technology Fund Class A ITYAX 1.40%
Columbia Seligman Global Technology Fund Class A SHGTX 1.42%
USAA Science & Technology Adviser Class USTCX 1.42%
Ivy Science & Technology Fund Class E ISTEX 1.43%
ICON Information Technology Fund Class S ICTEX 1.44%
BlackRock Science & Technology Opportunities Service Shares BSTSX 1.48%
Goldman Sachs Technology Opportunities Fund Class A GITAX 1.48%
RS Technology Fund Class A RSIFX 1.49%
AllianzGI Technology Administrative DGTAX 1.51%
Putnam Global Technology Fund Class R PGTRX 1.51%
Wells Fargo Specialized Technology Fund Class A WFSTX 1.51%
MFS Technology Fund Class R2 MTERX 1.52%
Nationwide Ziegler NYSEArcaTech100 Fund Class C NWJDX 1.53%
Ivy Science & Technology Fund Class R WSTRX 1.57%
Goldman Sachs Technology Opportunities Service Class GITSX 1.58%
Invesco Technology Sector Fund Class A IFOAX 1.58%
BlackRock Science & Technology Opportunities Investor A Shares BGSAX 1.59%
Rydex Technology Fund Class A RYTHX 1.59%
Columbia Seligman Communications and Information Fund Class R SCIRX 1.60%
Fidelity Advisor® Electronics Fund Class T FELTX 1.61%
AllianzGI Technology Fund Class A RAGTX 1.61%
Rydex Electronics Fund Class A RYELX 1.61%
Rydex Internet Fund Class A RYINX 1.61%
Fidelity Advisor® Communications Equip Fund Class T FDMTX 1.64%
Columbia Seligman Global Technology Fund Class R SGTRX 1.67%
Janus Global Technology Fund Class C JAGCX 1.72%
ICON Information Technology Fund Class A ICTTX 1.75%
Putnam Global Technology Fund Class M PGTMX 1.76%
Saratoga Technology & Communications Fund Class I STPIX 1.80%
Fidelity Advisor® Technology Fund Class C FTHCX 1.83%
BlackRock Science & Technology Opportunities R Shares BGSRX 1.85%
Deutsche Science and Technology Fund Class C KTCCX 1.85%
Rydex Internet Fund Class H RYIAX 1.85%
Rydex Electronics Fund Class H RYSAX 1.85%
Rydex Technology Fund Class H RYTAX 1.85%
Firsthand Technology Opportunities TEFQX 1.85%
Fidelity Advisor® Technology Fund Class B FABTX 1.90%
RS Technology Fund Class K RIFKX 1.93%
Ivy Science & Technology Fund Class C WSTCX 1.95%
Firsthand Alternative Energy ALTEX 1.98%
Berkshire Focus BFOCX 1.99%
Nationwide Bailard Tech&Sci Fund Class C NWHPX 1.99%
Putnam Global Technology Fund Class C PGTDX 2.01%
Putnam Global Technology Fund Class B PGTPX 2.01%
Ivy Science & Technology Fund Class B WSTBX 2.01%
MFS Technology Fund Class B MTCBX 2.02%
MFS Technology Fund Class C MTCCX 2.02%
MFS Technology Fund Class R1 MTCKX 2.02%
Fidelity Advisor® Electronics Fund Class C FELCX 2.05%
Dreyfus Technology Growth Fund Class C DTGCX 2.08%
Fidelity Advisor® Electronics Fund Class B FELBX 2.09%
Columbia Seligman Communications and Information Fund Class C SCICX 2.10%
Henderson Global Technology Fund Class C HFGCX 2.12%
Columbia Global Technology Growth Fund Class B CTCBX 2.14%
Fidelity Advisor® Communications Equip Fund Class B FDMBX 2.14%
Fidelity Advisor® Communications Equip Fund Class C FDMCX 2.14%
Columbia Global Technology Growth Fund Class C CTHCX 2.15%
Invesco Technology Fund Class C ITHCX 2.15%
Invesco Technology Fund Class B ITYBX 2.15%
Columbia Seligman Global Technology Fund Class B SHTBX 2.17%
Columbia Seligman Global Technology Fund Class C SHTCX 2.17%
Saratoga Technology & Communications Fund Class A STPAX 2.20%
Waddell & Reed Science & Technology Fund Class C WCSTX 2.20%
Goldman Sachs Technology Opportunities Fund Class C GITCX 2.23%
Wells Fargo Specialized Technology Fund Class C WFTCX 2.26%
Wells Fargo Specialized Technology Fund Class B WFTBX 2.27%
RS Technology Fund Class C RINCX 2.28%
Waddell & Reed Science & Technology Fund Class B USTBX 2.30%
Invesco Technology Sector Fund Class C IFOCX 2.32%
Invesco Technology Sector Fund Class B IFOBX 2.33%
Upright Growth UPUPX 2.34%
Rydex Technology Fund Class C RYCHX 2.35%
Rydex Internet Fund Class C RYICX 2.35%
Rydex Electronics Fund Class C RYSCX 2.35%
AllianzGI Technology Fund Class C RCGTX 2.36%
BlackRock Science & Technology Opportunities Investor C Shares BGSCX 2.40%
Hennessy Technology Institutional Class HTCIX 2.44%
Jacob Internet Investor Class JAMFX 2.46%
Hennessy Technology Investor HTECX 2.75%
Saratoga Technology & Communications Fund Class C STPCX 2.80%

When purchasing shares of a fund, you should always research the fund. This includes researching the investment strategy, fees and loads and historical returns. You should also consider your own portfolio allocation and strategy. 

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