Last week, we started discussing the Exchange Traded Fund world, covering the better-known ETF's such as the Nasdaq 100 Index (known as the Triple Qs or QQQ), Select Sector SPDRs, and the Semiconductor HOLDRS. Remember, ETFs are index-based investment products that allow buying and selling of shares of an entire portfolio of stocks in a single security. They combine the opportunities of indexing with the advantages of stock trading.

After the more-common ETFs, what other choices are there for the inquisitive investor? The ETF I like the best, since I tend to look at the comparable index, is the iShares Goldman Sachs Technology Index Fund. This is more IT-focused and centered on electronic-based technologies. The biggest problem is that the 10-day average trading volume can be quite low--about 18,000 shares per day. For small investors, this may not be a concern. And if investors want to focus on technology subsectors, iShares may make sense.

Leading names in the fund include the all-too-familiar list: IBM (8.72%), Microsoft (8.66%), Intel (8.36%), AOL Time Warner (5.93%), Cisco Systems (5.77% ), Oracle Systems (3.34%), Dell Computer (3.08%), Texas Instruments (2.11%), Sun Microsystems (1.73%), and Hewlett-Packard (1.73%).

Another IT-related index is the iShares Standard & Poor's Global Technology Sector Index Fund. This ETF seeks investment results that correspond to the performance of companies in the IT sector of the S&P's Global 1200 Index. Companies include those involved in the development and production of technology products, including computer hardware and software, telecommunications equipment, microcomputer components, integrated computer circuits, and office equipment using technology. This has a little more global flavor, because Nokia and Ericsson are among the fund's top 10 holdings, although Cisco, IBM, Intel, and Microsoft still make up 38.5% of the index. The biggest drawback is that its 10-day trading volume is only about 1,000 shares, compared with a 10-day trading average of 76 million shares for the best-known ETF, the Nasdaq 100 Index.

Other well-known iShares include:

• The iShares Dow Jones U.S. Technology Sector Index Fund, a fund that focuses on companies that develop and produce technology products, including computer hardware and software, telecommunications equipment, microcomputer components, integrated computer circuits, and office equipment.
• The iShares Dow Jones U.S. Internet Index Fund, which invests in Internet commerce and Internet service companies.
• The iShares Goldman Sachs Software Index Fund, which includes companies that produce client-server, enterprise, Internet, PC, and entertainment software.
• The iShares Goldman Sachs Semiconductor Index, which includes companies that produce capital equipment or manufacture wafers and chips.

Another alternative to subsector technology investing is the HOLDRS. This group includes: Broadband HOLDRS, B2B Internet HOLDRS, Internet HOLDRS, Semiconductor HOLDRS, Software HOLDRS, and Wireless HOLDRS. These trusts represent various companies involved in just one narrow technology sector.

If you want to pick an ETF that represents IT, I still like Select Sector SPDRS and the iShares Goldman Sachs Technology Index Fund. These ETFs have reasonable liquidity for the small investor, and they provide a panorama of companies. You also don't buy into the tax liability of prior investors that sometimes occurs in mu-tual funds.

Unfortunately, neither do you get active investment management--and if there's one thing we've learned in the past few years, it's that very few companies can afford to stay the same in technology. If investors gamble on just one sector, or worse, one subsector, they clearly haven't learned any lessons from the prior years. These investments should only be a small portion of a broader, diversified portfolio.

William Schaff is chief investment officer at Bay Isle Financial Corp., which manages the InformationWeek 100 Stock Index. Reach him at bschaff@bayisle.com.