You might call it the “iPhone Factor.” Whatever the reason, ETFs that specialize in investing in tech companies remain hot.

“The runaway success of Apple’s iPhone, and Research in Motion’s Blackberry before it, is driving a shift throughout the information technology sector that will likely be felt for years to come. Standard & Poor’s Equity Research recommends investors overweight information technology stocks, and has a positive outlook for the technology sector in 2010, where operating earnings per share are expected to rise by 41%,” comments Vaughan Scully of Standard & Poors.

Scully, who writes a column on ETFs for Investment Advisor, notes the many broad-market ETFs which have large portions of their assets invested in technology stocks because they track technology-laden indexes such as the Nasdaq 100 or the MSCI Taiwan index. He adds that, “There are also global and regional technology ETFs and specific industry funds targeting areas like software or networking equipment.”

So which ETFs come out on to? Technology Select Sector SPDR Fund (XLK) leads in assets. It is the largest of the technology ETFs, with $4 billion in assets—triples the next largest dedicated technology fund. Another positive: it has the lowest annual expense ratio of the group. However, its performance, according to Scully is only average. Still this is the fund that many investors select because it has the best known large-cap tech stocks: AAPL, MSFT, and IBM account for about 30% of the fund, though it owns 86 different stocks in total.

There are other tech ETFs to explore. There is a relatively small group of international technology ETFs. One that is diversified both geographically and on a sector basis is the SPDR S&P International Technology Sector (IPK). “While it is a small fund, with just $20 million in assets, its performance has lagged lately,” notes Scully. A recent addition is the PowerShares S&P SmallCap Information Technology Portfolio (XLKS). It offers exposure to lesser-known technology names by targeting the exciting small-cap corner