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Should You Invest in the iShares Expanded TechSoftware Sector ETF (IGV)?
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Designed to provide broad exposure to the Technology - Software segment of the equity market, the iShares Expanded TechSoftware Sector ETF (IGV - Free Report) is a passively managed exchange traded fund launched on 07/10/2001.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also 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 - Software is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 11, placing it in bottom 31%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $4.63 billion, making it one of the largest ETFs attempting to match the performance of the Technology - Software segment of the equity market. IGV seeks to match the performance of the S&P North American Technology-Software Index before fees and expenses.
The S&P North American Expanded Technology Software Index comprises of North American equities in the software industry and select North American equities from interactive home entertainment and interactive media and services industries.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.43%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.01%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. 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 92.60% of the portfolio.
Looking at individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 9.02% of total assets, followed by Salesforce.com Inc (CRM - Free Report) and Adobe Inc (ADBE - Free Report) .
The top 10 holdings account for about 51.18% of total assets under management.
Performance and Risk
The ETF has lost about -28.38% so far this year and is down about -29.54% in the last one year (as of 07/07/2022). In that past 52-week period, it has traded between $257.24 and $446.52.
The ETF has a beta of 1.05 and standard deviation of 31.70% for the trailing three-year period, making it a high risk choice in the space. With about 134 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Expanded TechSoftware Sector 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, IGV is an excellent 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.
Invesco Dynamic Software ETF tracks Dynamic Software Intellidex Index and the SPDR S&P Software & Services ETF (XSW - Free Report) tracks S&P Software & Services Select Industry Index. Invesco Dynamic Software ETF has $214.59 million in assets, SPDR S&P Software & Services ETF has $219.07 million. PSJ has an expense ratio of 0.56% and XSW charges 0.35%.
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 Expanded TechSoftware Sector ETF (IGV)?
Designed to provide broad exposure to the Technology - Software segment of the equity market, the iShares Expanded TechSoftware Sector ETF (IGV - Free Report) is a passively managed exchange traded fund launched on 07/10/2001.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also 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 - Software is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 11, placing it in bottom 31%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $4.63 billion, making it one of the largest ETFs attempting to match the performance of the Technology - Software segment of the equity market. IGV seeks to match the performance of the S&P North American Technology-Software Index before fees and expenses.
The S&P North American Expanded Technology Software Index comprises of North American equities in the software industry and select North American equities from interactive home entertainment and interactive media and services industries.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.43%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.01%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. 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 92.60% of the portfolio.
Looking at individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 9.02% of total assets, followed by Salesforce.com Inc (CRM - Free Report) and Adobe Inc (ADBE - Free Report) .
The top 10 holdings account for about 51.18% of total assets under management.
Performance and Risk
The ETF has lost about -28.38% so far this year and is down about -29.54% in the last one year (as of 07/07/2022). In that past 52-week period, it has traded between $257.24 and $446.52.
The ETF has a beta of 1.05 and standard deviation of 31.70% for the trailing three-year period, making it a high risk choice in the space. With about 134 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Expanded TechSoftware Sector 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, IGV is an excellent 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.
Invesco Dynamic Software ETF tracks Dynamic Software Intellidex Index and the SPDR S&P Software & Services ETF (XSW - Free Report) tracks S&P Software & Services Select Industry Index. Invesco Dynamic Software ETF has $214.59 million in assets, SPDR S&P Software & Services ETF has $219.07 million. PSJ has an expense ratio of 0.56% and XSW charges 0.35%.
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.