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Should You Invest in the iShares U.S. Technology ETF (IYW)?
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If you're interested in broad exposure to the Technology - Broad segment of the equity market, look no further than the iShares U.S. Technology ETF (IYW - Free Report) , a passively managed exchange traded fund launched on 05/15/2000.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways 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 8, placing it in top 50%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $18.87 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
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.40%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.22%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector--about 89.60% of the portfolio. Telecom and Industrials round out the top three.
Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 16.35% of total assets, followed by Microsoft Corp (MSFT - Free Report) and Nvidia Corp (NVDA - Free Report) .
The top 10 holdings account for about 62.85% of total assets under management.
Performance and Risk
The ETF has gained about 23.24% so far this year and is up roughly 46.02% in the last one year (as of 09/30/2024). In that past 52-week period, it has traded between $101.31 and $158.73.
The ETF has a beta of 1.15 and standard deviation of 26.83% for the trailing three-year period, making it a medium risk choice in the space. With about 145 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares U.S. Technology ETF holds a Zacks ETF Rank of 1 (Strong 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 $70 billion in assets, Vanguard Information Technology ETF has $76.78 billion. XLK has an expense ratio of 0.09% 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)?
If you're interested in broad exposure to the Technology - Broad segment of the equity market, look no further than the iShares U.S. Technology ETF (IYW - Free Report) , a passively managed exchange traded fund launched on 05/15/2000.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways 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 8, placing it in top 50%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $18.87 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
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.40%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.22%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector--about 89.60% of the portfolio. Telecom and Industrials round out the top three.
Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 16.35% of total assets, followed by Microsoft Corp (MSFT - Free Report) and Nvidia Corp (NVDA - Free Report) .
The top 10 holdings account for about 62.85% of total assets under management.
Performance and Risk
The ETF has gained about 23.24% so far this year and is up roughly 46.02% in the last one year (as of 09/30/2024). In that past 52-week period, it has traded between $101.31 and $158.73.
The ETF has a beta of 1.15 and standard deviation of 26.83% for the trailing three-year period, making it a medium risk choice in the space. With about 145 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares U.S. Technology ETF holds a Zacks ETF Rank of 1 (Strong 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 $70 billion in assets, Vanguard Information Technology ETF has $76.78 billion. XLK has an expense ratio of 0.09% 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.