Invesco AI and Next Gen Software ETF: A Strong Choice for Tech Investors
Designed to provide broad exposure to the Technology – Software segment of the equity market, the Invesco AI and Next Gen Software ETF (IGPT) is a passively managed exchange traded fund launched on 06/23/2005.
This fund is a great option for long-term investors. Passively managed ETFs are favored by both institutional and retail investors because they offer low costs, transparency, flexibility, and tax efficiency.
Sector ETFs provide a convenient way to gain diversified and low-risk exposure to various companies in specific sectors. Technology – Software is one of the 16 broad Zacks sectors. Currently, it ranks 6th, placing it in the top 38% of sectors.
Key Features of IGPT
The fund is sponsored by Invesco and has gathered over $454 million in assets, which makes it an average-sized ETF focusing on the Technology – Software market. IGPT aims to match the performance of the STOXX World AC NexGen Software Development Index before fees and expenses.
This index consists of companies with considerable engagement in technologies or services that pave the way for future software development through direct revenue streams.
Cost Efficiency
Cost is crucial when picking the right ETF. Typically, lower-cost funds can perform better than their pricier counterparts if other factors remain equal.
This ETF has annual operating expenses of 0.58%, aligning it with most similar products in the market.
Sector Breakdown and Major Holdings
While ETFs provide diversified exposure that reduces the risk tied to individual stocks, reviewing the actual holdings is essential. Fortunately, most ETFs are open about their holdings, typically disclosing them daily.
This ETF allocates approximately 60.60% of its portfolio to the Information Technology sector, with Telecom and Healthcare following closely behind.
Nvidia Corp (NVDA) represents about 8.40% of total assets, with Alphabet Inc (GOOGL) and Meta Platforms Inc (META) also being significant contributors.
In fact, the top 10 holdings constitute around 57.94% of the fund’s total assets under management.
Performance Metrics and Risk Assessment
As of 02/12/2025, the ETF has increased by about 5.63% this year and has appreciated approximately 11.03% over the past year. Throughout the last 52 weeks, it has traded between $40.26 and $49.76.
The fund has a beta of 1.02 and a standard deviation of 22.57% over the trailing three years. With about 99 holdings, it successfully diversifies individual company risks.
Exploring Alternatives
The Invesco AI and Next Gen Software ETF boasts a Zacks ETF Rank of 1 (Strong Buy), based on expectations for asset class returns, expense ratios, and market momentum. Thus, IGPT is an excellent choice for investors interested in the Technology ETF segment. However, other options are available in this market as well.
For example, the SPDR S&P Software & Services ETF (XSW) tracks the S&P Software & Services Select Industry Index and has $581.79 million in assets, while the iShares Expanded Tech-Software Sector ETF (IGV), which follows the S&P North American Technology-Software Index, has $11.55 billion in assets. The expense ratio for XSW is 0.35%, and IGV charges 0.41%.
Conclusion
To delve deeper into this ETF and others, consider screening for products that align with your investment goals and reading articles on the latest ETF investing trends at the Zacks ETF Center.
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Invesco AI and Next Gen Software ETF (IGPT): ETF Research Reports
NVIDIA Corporation (NVDA): Free Stock Analysis Report
Alphabet Inc. (GOOGL): Free Stock Analysis Report
SPDR S&P Software & Services ETF (XSW): ETF Research Reports
iShares Expanded Tech-Software Sector ETF (IGV): 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 the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
