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
- Technology Hardware and Equipment
- Semiconductors and Semiconductor Equipment
- Information Technology Sector ETFs and Mutual Funds
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.
| Industry | Sub-Industry | Description |
|---|---|---|
| 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.
| Industry | Sub-Industry | Description |
|---|---|---|
| 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.
| Industry | Sub-Industry | Description |
|---|---|---|
| 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.