Software

Should you invest in iShares Expanded Technology Software Sector ETF (IGV)?

Looking for broad exposure to the technology-software sector of the stock market? Consider iShares Expanded Tech-Software Sector ETF (IGV), a passively managed exchange-traded fund established on July 10, 2001 .

Individual and institutional investors are increasingly turning to passively managed ETFs, which offer lower costs, transparency, flexibility and tax efficiency. This type of fund is also a great vehicle for long-term investors.

Sector ETFs also provide investors with access to a broad group of companies in a particular sector, providing low-risk and diversified exposure. Technology – Software is one of 16 broad Zacks sectors within the Zacks Industry classification. Currently in 4th place and in the top 25%.

Index details

This fund is sponsored by BlackRock. The company has amassed more than $7.68 billion in assets, making it one of the largest ETFs that seeks to match the performance of the technology and software sector of the stock market. IGV seeks to match the performance of the S&P North American Technology Software Index, excluding fees and expenses.

The S&P North America Expanded Technology Software Index is comprised of North American stocks from the software industry, as well as selected North American stocks from the interactive home entertainment, interactive media, and services industries.

cost

Expense ratios are an important factor when considering an ETF’s total return, and all else being equal, cheaper funds can significantly outperform more expensive funds over the long term. there is.

This ETF has annual operating expenses of 0.41%, making it one of the cheapest products in the space.

The dividend yield after 12 months is 0.01%.

Sector exposure and top holdings

Although ETFs offer diversified exposure and thus minimize single-stock risk, it is still important to closely examine a fund’s holdings before investing. Most ETFs are highly transparent products, with many disclosing their holdings on a daily basis.

This ETF has the highest allocation to the Information Technology sector, accounting for approximately 96.70% of its portfolio.

Looking at individual holdings, Salesforce Inc (CRM) accounts for about 9.40% of total assets, followed by Microsoft Corp (MSFT) and Adobe Inc (ADBE).

The top 10 holdings account for approximately 60.58% of total assets under management.

performance and risk

The ETF has added about 3.14% so far this year and is up about 59.93% over the past year (as of January 22, 2024). Over the past 52 weeks, the stock has traded between $272.25 and $418.37.

This ETF has a trailing three-year beta of 1.08 and a standard deviation of 28.18%, making it a high-risk choice in this space. With approximately 119 holdings, we effectively diversify company-specific risks.

Alternative proposal

The IShares Expanded High-Tech Software Sector ETF holds a Zacks ETF Rank #1 (Strong Buy), which is based on factors such as the asset class’s expected return, expense ratio, and momentum. This makes IGV an excellent choice for investors seeking exposure to the technology ETF segment of the market. There are additional ETFs in this space that investors can consider.

Invesco AI and Next Gen Software ETF (IGPT) tracks STOXX WORLD AC NEXGEN SOFTWARE DEV ID and SPDR S&P Software & Services ETF (XSW) tracks S&P Software & Services Select Industry Index. The Invesco AI and Next Generation Software ETF has $194.02 million in assets, and the SPDR S&P Software & Services ETF has $352.94 million. IGPT’s expense ratio is 0.60% and XSW’s commission is 0.35%.

conclusion

To learn more about this and other ETFs, find products that fit your investment objectives, and read articles about the latest developments in the world of ETF investing, visit the Zacks ETF Center.

Want the latest recommendations from Zacks Investment Research? Today you can download 7 Best Stocks for the Next 30 Days.Click to get this free report

iShares Enhanced Technology Software Sector ETF (IGV): ETF Research Report

Microsoft Corporation (MSFT): Free Stock Analysis Report

Salesforce Inc. (CRM): Free Stock Analysis Report

Adobe Inc. (ADBE): Free stock price analysis report

SPDR S&P Software & Services ETF (XSW): ETF Research Report

Invesco AI and Next Generation Software ETF (IGPT): ETF Research Report

Click here to read this article on Zacks.com.

Zacks Investment Research


Source link

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button