Networking ETFs Pick Up Steam

Although the two funds have some overlap, IGN's top holdings tend to carry slightly more weight within the fund. Additionally, IGN carries a substantially lower expense ratio (0.48%) than its PowerShares competitor (PXQ has a 0.68% expense ratio).

IGN's top 10 holdings are Juniper Networks, 9.45%; Motorola, 9.38%; Qualcomm, 9.24%; Cisco Systems(CSCO), 8.57%; Research in Motion(RIMM), 6.89%; F5 Networks(FFIV) (FFIV) 5.57%; Harris, (HRS), 4.36%; Tellabs(TLAB), 4.15%; Polycom(PLCM), 3.74%; and Commscope(CTV), 3.58%.

Meanwhile, PXQ's top 10 holdings are VMware(VMW), 5.73%; Qualcomm, 5.40%; Broadcom(BRCM), 5.38%; Citrix Systems(CTXS), 5.38%; Amphenol(APH), 5.25%; Juniper Networks, 5.18%; Symantec(SYMC), 5.13%; Cisco Systems, 5.01%; ADC Telecom(ADCT), 4.15%; and F5 Networks, 3.30%.

While IGN's lower expense ratio may be initially appealing to prospective investors, keep in mind that the fund's higher holding weightings make it more sensitive to the performance of individual companies.

Granted, the entire networking sector appears to be performing well, so this may not be a source of major concern for many. The two funds are neck-and-neck in terms of YTD returns, with PXQ leading with 63.15% growth over IGN's 60.57%.

Still, with hefty exposure to smartphone manufacturers such as MOT and RIMM, I believe investors have a purer networking play in PXQ.

-- Written by Don Dion in Williamstown, Mass.

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