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Should You Invest in the iShares U.S. Technology ETF (IYW)?
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The iShares U.S. Technology ETF (IYW - Free Report) was launched on 05/15/2000, and is a passively managed exchange traded fund designed to offer broad exposure to the Technology - Broad segment of the equity market.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 5, placing it in top 31%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $7.92 billion, making it one of the largest ETFs attempting to match the performance of the Technology - Broad segment of the equity market. IYW seeks to match the performance of the Dow Jones U.S. Technology Index before fees and expenses.
The Russell 1000 Technology RIC 22.5/45 Capped Index includes companies in the following sectors: software and computer services and technology hardware and equipment. The Index is capitalization-weighted and includes only companies in the technology industry of the Dow Jones U.S. Total Market Index.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.39%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.50%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector--about 85% of the portfolio, followed by Telecom.
Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 18.66% of total assets, followed by Microsoft Corp (MSFT - Free Report) and Alphabet Inc Class A (GOOGL - Free Report) .
The top 10 holdings account for about 62.67% of total assets under management.
Performance and Risk
Year-to-date, the iShares U.S. Technology ETF has gained about 1.33% so far, and is down about -30.04% over the last 12 months (as of 01/10/2023). IYW has traded between $70.72 and $110.79 in this past 52-week period.
The ETF has a beta of 1.13 and standard deviation of 32.88% for the trailing three-year period, making it a medium risk choice in the space. With about 147 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares U.S. Technology ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IYW is a great option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Technology Select Sector SPDR ETF (XLK - Free Report) tracks Technology Select Sector Index and the Vanguard Information Technology ETF (VGT - Free Report) tracks MSCI US Investable Market Information Technology 25/50 Index. Technology Select Sector SPDR ETF has $38.75 billion in assets, Vanguard Information Technology ETF has $39.99 billion. XLK has an expense ratio of 0.10% and VGT charges 0.10%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Should You Invest in the iShares U.S. Technology ETF (IYW)?
The iShares U.S. Technology ETF (IYW - Free Report) was launched on 05/15/2000, and is a passively managed exchange traded fund designed to offer broad exposure to the Technology - Broad segment of the equity market.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 5, placing it in top 31%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $7.92 billion, making it one of the largest ETFs attempting to match the performance of the Technology - Broad segment of the equity market. IYW seeks to match the performance of the Dow Jones U.S. Technology Index before fees and expenses.
The Russell 1000 Technology RIC 22.5/45 Capped Index includes companies in the following sectors: software and computer services and technology hardware and equipment. The Index is capitalization-weighted and includes only companies in the technology industry of the Dow Jones U.S. Total Market Index.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.39%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.50%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector--about 85% of the portfolio, followed by Telecom.
Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 18.66% of total assets, followed by Microsoft Corp (MSFT - Free Report) and Alphabet Inc Class A (GOOGL - Free Report) .
The top 10 holdings account for about 62.67% of total assets under management.
Performance and Risk
Year-to-date, the iShares U.S. Technology ETF has gained about 1.33% so far, and is down about -30.04% over the last 12 months (as of 01/10/2023). IYW has traded between $70.72 and $110.79 in this past 52-week period.
The ETF has a beta of 1.13 and standard deviation of 32.88% for the trailing three-year period, making it a medium risk choice in the space. With about 147 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares U.S. Technology ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IYW is a great option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Technology Select Sector SPDR ETF (XLK - Free Report) tracks Technology Select Sector Index and the Vanguard Information Technology ETF (VGT - Free Report) tracks MSCI US Investable Market Information Technology 25/50 Index. Technology Select Sector SPDR ETF has $38.75 billion in assets, Vanguard Information Technology ETF has $39.99 billion. XLK has an expense ratio of 0.10% and VGT charges 0.10%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.