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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.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. 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 $6.60 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 0.41%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.37%.
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 85.80% of the portfolio, followed by Telecom.
Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 17.66% 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 63.45% of total assets under management.
Performance and Risk
Year-to-date, the iShares U.S. Technology ETF has lost about -28.77% so far, and is down about -23.92% over the last 12 months (as of 09/05/2022). IYW has traded between $77.53 and $117.09 in this past 52-week period.
The ETF has a beta of 1.13 and standard deviation of 30.94% for the trailing three-year period, making it a medium risk choice in the space. With about 154 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 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.
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 $40.20 billion in assets, Vanguard Information Technology ETF has $42.56 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)?
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.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. 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 $6.60 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 0.41%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.37%.
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 85.80% of the portfolio, followed by Telecom.
Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 17.66% 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 63.45% of total assets under management.
Performance and Risk
Year-to-date, the iShares U.S. Technology ETF has lost about -28.77% so far, and is down about -23.92% over the last 12 months (as of 09/05/2022). IYW has traded between $77.53 and $117.09 in this past 52-week period.
The ETF has a beta of 1.13 and standard deviation of 30.94% for the trailing three-year period, making it a medium risk choice in the space. With about 154 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 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.
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 $40.20 billion in assets, Vanguard Information Technology ETF has $42.56 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.