Leverage the Booming Tech Sector with this iShares ETF

There's no question that technology, pandemic or not, will continue to thrive as the world tries to regain a sense of normalcy from Covid-19. That said, investors have the ability to continue to leverage tech via exchange-traded fund (ETF) offerings from iShares.

One of those funds to consider is the iShares U.S. Technology ETF (IYW). The fund seeks to track the investment results of the Dow Jones U.S. Technology Capped Index.

The fund generally invests at least 90% of its assets in securities of the underlying index and in depositary receipts representing securities of the underlying index. The underlying index measures the performance of U.S. companies in the technology sector.

IYW gives investors:

  • Exposure to U.S. electronics, computer software and hardware, and informational technology companies
  • Targeted access to domestic technology stocks
  • Use to express a sector view

Tech in the Short-Term

Getting a read on tech requires looking at one of its bellwether indexes, which of course is the Nasdaq Composite. As far as where it's headed in the short-term, it appears more upside is ahead given how traders are reacting.

"Despite last week’s market dip, the tech-heavy Nasdaq remains around 3% away from its record high," a Reuters article said. "Traders - many of them retail investors - have plowed back into call options, used to position for gains in shares."

“There hasn’t been that catalyst to really move the market down,” said Matt Amberson, principal at options analytics firm ORATS. “Starting from late September, we’ve seen call buying come back.”

^IXIC Chart

The article also noted that "since its recent trough on Sept. 23, the Nasdaq has climbed nearly 10%. The index includes many growth-oriented companies, whose shares remain in favor in the wake of the novel coronavirus pandemic as their businesses have remained largely intact."

"Speculators in the futures market have had a dramatic change of heart," the article added. "Funds have pulled back from one of the biggest short positions in U.S. tech stocks in over a decade, in a near-record buying spree of Nasdaq futures, CFTC data from last week showed."

Investors can look to take advantage of tech on a global scale through funds like the iShares Global Tech ETF (IXN). IXN seeks to track the investment results of the S&P Global 1200 Information Technology IndexTM. The fund generally invests at least 90% of its assets in securities of the index and in depositary receipts representing securities of the index.

It may invest the remainder of its assets in certain futures, options and swap contracts, cash and cash equivalents, as well as in securities not included in the index. The index measures the performance of companies that the index provider deems to be part of the information technology sector of the economy and that the index provider believes are important to global markets.

For more market trends, visit ETF Trends.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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