The iShares Expanded Tech Sector ETF (IGM) was launched on 03/13/2001, and is a passively managed exchange traded fund designed to offer broad exposure to the Technology – Broad segment of the equity market.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology – Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 10, placing it in bottom 38%.
The fund is sponsored by Blackrock. It has amassed assets over $3.73 billion, making it one of the larger ETFs attempting to match the performance of the Technology – Broad segment of the equity market. IGM seeks to match the performance of the S&P North American Technology Sector Index before fees and expenses.
The S&P North American Expanded Technology Sector Index comprises of North American equities in the technology sector and select North American equities from communication services to consumer discretionary sectors.
Investors should also pay attention to an ETF’s expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain 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 0.17%.
Sector Exposure and Top Holdings
It is important to delve into an ETF’s holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, 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 72.50% of the portfolio. Telecom and Consumer Discretionary round out the top three.
Looking at individual holdings, Microsoft Corp (MSFT) accounts for about 9.35% of total assets, followed by Apple Inc (AAPL) and Amazon Com Inc (AMZN).
The top 10 holdings account for about 49.98% of total assets under management.
Performance and Risk
The ETF has lost about -5.85% so far this year and is up about 19.09% in the last one year (as of 01/10/2022). In that past 52-week period, it has traded between $341.31 and $450.49.
The ETF has a beta of 1.07 and standard deviation of 26.07% for the trailing three-year period, making it a medium risk choice in the space. With about 331 holdings, it effectively diversifies company-specific risk.
IShares Expanded Tech Sector ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IGM 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) tracks Technology Select Sector Index and the Vanguard Information Technology ETF (VGT) tracks MSCI US Investable Market Information Technology 25/50 Index. Technology Select Sector SPDR ETF has $49.54 billion in assets, Vanguard Information Technology ETF has $53.46 billion. XLK has an expense ratio of 0.12% and VGT charges 0.10%.
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.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.