The proliferation of ETFs has arguably been the best trend for ordinary retail investors over the last decade. Because they are composed of many different stock holdings, ETFs offer investors instant diversification, much like mutual funds. However, ETFs generally offer this diversification with lower fees, more price transparency, and better tax efficiency.

However, you should still learn about an ETF and the niche it represents before you buy a share of it. This is especially important in the fast-moving technology field. With that in mind, let's look at the top tech-sector ETF this week, with more than $200 million in assets under management and average-trading volume of 100,000 shares, that outperformed the Nasdaq Composite's roughly flat performance for the week ended Dec. 4.

A good week for semiconductors
It's been a tough year overall for semiconductors, compared with the greater Nasdaq, with the Philadelphia Semiconductor Index reporting a year-to-date return of 0.83% versus a nearly 9% gain for the latter. Over the past three months, however, the conditions have reversed, with the semiconductor-index noticeably outgaining the Nasdaq. This comparative rally continued this week, with the iShares Philadelphia Semiconductor Index ETF (SOXX 2.71%) posting gains of 3% over the week ended Dec. 4.

As the ETF's name denotes, the passive investment is designed to replicate the returns of the actual Philly Semiconductor Index, with large stakes in chipmakers Intel, Texas Instruments, Avago Technologies (AVGO 0.86%), Qualcomm (QCOM 1.25%), and Taiwan Semiconductor Manufacturing comprising nearly 40% of the total ETF. Perhaps the biggest downside is the fund's moderately high expense ratio of 0.47% -- higher than many broad-based tech ETFs that have expense ratios as low as 0.20%.

How did the Philly index ETF overachieve?
For the single largest catalyst for the iShares Philly Semiconductor ETF, look no further than the preceding list, as all of those names outperformed the Nasdaq's flat performance. However, the noticeable standout was Avago Technologies, which had an amazing run of 14% this week alone. The impetus for this incredible week was due to the company's reporting better-than-expected fiscal-fourth-quarter results. As the position is roughly 7.5% of the iShares ETF's holdings, this one stock alone strongly added to iShares ETF's gains.

Additionally, iShares Philadelphia Semiconductor ETF was bolstered by an impressive increase from mobile chipmaker Qualcomm. On Wednesday alone, the stock jumped 5% because of a new licensing deal with Chinese smartphone maker Xiaomi. This was great news for Qualcomm for two reasons: In addition to the obvious revenue increase from a new customer, the deal serves as a powerful symbol that the company could be over its Chinese problems. Earlier this year, the company paid nearly $1 billion in fines as the result of an antitrust probe and has continued to struggle. Acceptance by Xiaomi appears to signify a reset in the company's Chinese ambitions.

If you're in the market for more technology exposure, check out the iShares Philadelphia Semiconductor Index ETF to see if it fits your risk and return profile. More broadly, though, the proliferation of ETFs has given investors more choice, lower costs, easier diversification, better tax management, and more transparent market pricing. This is one investment trend all retail investors should celebrate.