NEW YORK (TheStreet) -- As we head into the final days of 2011, investor confidence continues to be tested by the deluge of concerning economic news coming from regions across the globe. With Europe still embroiled in its sovereign debt woes and slowdown fears gripping emerging nations like China, U.S. investors may be temped to ring in the new year from the safety of defensive assets like cash. Despite these daunting fears, I encourage investors to avoid fleeing the markets entirely.
Maintaining exposure to this market does not necessarily mean diving headfirst into risk, however. Given the shaky action we are witnessing, conservative investors looking to construct a well-balanced portfolio should be on the lookout for ways to access the safest regions of growth-correlated sectors. For example, investors looking to gain exposure to technology at this time may want to turn their attention toward the software industry.
Comparing the performance of the iShares S&P North American Technology Software Index Fund (IGV) to that of other technology-focused ETFs, it is clear that software has been a big winner in 2011. Over the past month, three months, six months, and year-to-date periods, IGV has managed to handedly outpace products including the iShares S&P North American Technology Multimedia Networking Index Fund (IGN), and the iShares PHLX SOX Semiconductor Index Fund (SOXX).
>>Also see: Oracle, Nike: After-Hours TradingWhile IGV has not been immune to market shocks, the fund's strengths have shown through during these periods of tumult. In December, for example, as SOXX and IGN retreated to their November lows, IGV has managed to stay buoyed above this level. The same thing occurred earlier in the year as well; as September's shaky action caused SOXX and IGN to tumble back to August doldrums, IGV managed to lock in a higher low. This week is an exciting one for investors looking to target the software industry using IGV. As I mentioned in Monday's feature, Red Hat (RHT) and Oracle (ORCL) found themselves on the earnings calendar. Both of these firms can be found listed within the fund's top 10 holdings. Together they account for over 10% of its total assets. RHT, the first name on the docket, kicked things off on a sour note. Despite beating analysts' quarterly estimates, investors were left uninspired by the company's in-line revenue and weak sales outlook. As a result, shares took a hit during Tuesday trading.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV