The iShares Expanded Tech Sector ETF (IGM) offers investors a strong option in the Technology – Broad equity market, having launched on 03/13/2001.
Many retail and institutional investors prefer passively managed exchange-traded funds (ETFs) due to their cost efficiency, transparency, and flexibility. These funds are particularly attractive for long-term investment strategies.
Sector-specific ETFs, like the one focused on Technology – Broad, provide a simple way to access a diversified portfolio across numerous companies in a specific area. Currently, this sector ranks 1, placing it in the top 6% of the 16 broad segments identified by Zacks Industry classification.
Fund Overview
Sponsored by BlackRock, the iShares Expanded Tech Sector ETF has accumulated over $5.98 billion in assets, positioning it among the largest ETFs tailored to mimic the Technology – Broad market. The ETF aims to replicate the performance of the S&P North American Technology Sector Index before accounting for fees and expenses.
This index encapsulates North American equities within the technology sector and includes selected companies from communication services to consumer discretionary sectors.
Cost Analysis
When choosing an ETF, cost is a crucial consideration. Generally, lower expense funds can yield better returns than their more expensive alternatives if all other factors are equal.
The annual operating expenses for IGM are 0.41%, which ranks it as one of the more affordable options in this market segment.
The ETF has a trailing dividend yield of 0.21% over the past twelve months.
Sector Composition and Major Holdings
Though ETFs inherently provide diversified exposure, understanding the individual holdings can offer deeper insights. Most ETFs, including IGM, transparently disclose their holdings on a daily basis.
This ETF predominantly invests in the Information Technology sector, which constitutes approximately 76.90% of its portfolio, with Telecom in second place.
Among its holdings, Nvidia Corp (NVDA) makes up about 8.93% of total assets, followed by Meta Platforms Inc Class A (META) and Apple Inc (AAPL). The top 10 holdings together constitute roughly 53.18% of total assets under management.
Performance and Risk Assessment
So far this year, IGM has delivered a return of approximately 40.26%, and it has increased around 40.46% over the last year (as of 12/24/2024). In the past 52 weeks, the ETF has traded within the range of $71.57 to $106.95.
With a beta of 1.18 and a standard deviation of 26.49% observed over the trailing three-year period, IGM is considered a medium-risk investment. With around 282 holdings, it effectively mitigates company-specific risks.
Consider Alternatives
The iShares Expanded Tech Sector ETF has earned a Zacks ETF Rank of 1 (Strong Buy) based on anticipated asset class return, expense ratio, and momentum, positioning IGM as an appealing choice for those seeking exposure within the Technology ETFs market. Other ETFs in the sector are also worth considering.
The Technology Select Sector SPDR ETF (XLK), which tracks the Technology Select Sector Index, manages $74.36 billion in assets and has an expense ratio of 0.09%. The Vanguard Information Technology ETF (VGT), tracking the MSCI US Investable Market Information Technology 25/50 Index, oversees $85.49 billion and charges a 0.10% expense ratio.
In Summary
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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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Zacks Investment Research
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
