Launched on 03/13/2001, the iShares Expanded Tech Sector ETF (IGM) is a passively managed exchange traded fund that aims to provide broad exposure to the Technology – Broad segment of the equity market.
These passively managed ETFs are gaining popularity among both institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency, making them excellent choices for long-term investment strategies.
Sector ETFs offer a convenient way to achieve diversified exposure to various companies within specific sectors. The Technology – Broad sector is one of the 16 broad categories in the Zacks Industry classification, and currently, it holds a top rank of 1, placing it in the top 6% of sectors.
Fund Overview and Index Details
The fund is sponsored by Blackrock, with assets surpassing $5.52 billion, positioning it among the largest ETFs targeting the Technology – Broad segment. IGM aims to mirror the performance of the S&P North American Technology Sector Index, before fees and expenses.
This index includes North American equities in the technology sector along with select equities from the communication services and consumer discretionary sectors.
Cost Structure
Expense ratios play a crucial role in determining an ETF’s total return. Lower-cost funds often outperform their more expensive peers in the long run, provided other factors are consistent.
IGM has annual operating expenses of 0.41%, categorizing it as a cost-effective option within the ETF landscape.
Additionally, it boasts a 12-month trailing dividend yield of 0.23%.
Sector Allocations and Key Holdings
While ETFs provide diversified exposure and minimize individual stock risk, it’s essential for investors to examine a fund’s holdings. Most ETFs maintain transparency by regularly disclosing their holdings.
In IGM, the largest allocation is in the Information Technology sector, comprising approximately 78.20% of the portfolio, followed by significant investments in Telecom.
Among the top holdings, Meta Platforms Inc Class A (META) constitutes about 8.85% of total assets, with Apple Inc (AAPL) and Nvidia Corp (NVDA) also being noteworthy contributors.
The top 10 holdings collectively account for around 53.80% of the fund’s total assets.
Performance Overview and Risk Assessment
This year, the iShares Expanded Tech Sector ETF has experienced a notable increase of roughly 31.88% as of 10/22/2024. Over the past twelve months, the ETF has seen growth of about 55.97% and has traded between $60.98 and $99.18 within the last 52 weeks.
With a beta of 1.18 and a standard deviation of 26.57% over the trailing three-year period, IGM is viewed as a medium-risk investment. Its 286 holdings effectively reduce company-specific risk.
Considering Alternatives
The iShares Expanded Tech Sector ETF holds a Zacks ETF Rank of 1 (Strong Buy), driven by expectations of asset class returns, cost-effectiveness, and momentum. Consequently, IGM is an attractive choice for those seeking exposure to technology-focused ETFs. Other similar ETF alternatives include Technology Select Sector SPDR ETF (XLK), which tracks the Technology Select Sector Index, and the Vanguard Information Technology ETF (VGT), which follows the MSCI US Investable Market Information Technology 25/50 Index.
XLK has $71.96 billion in assets, while VGT has $79.89 billion, with expense ratios of 0.09% and 0.10%, respectively.
Conclusion
For more information on this ETF and others, consider exploring products that align with your investment goals and stay informed on the latest developments in the ETF market. Visit Zacks ETF Center for additional insights.
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iShares Expanded Tech Sector ETF (IGM): ETF Research Reports
Apple Inc. (AAPL): Free Stock Analysis Report
NVIDIA Corporation (NVDA): Free Stock Analysis Report
Technology Select Sector SPDR ETF (XLK): ETF Research Reports
Vanguard Information Technology ETF (VGT): ETF Research Reports
Meta Platforms, Inc. (META): Free Stock Analysis Report
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
