Should You Invest in the Invesco AI and Next Gen Software ETF (IGPT)?
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.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Software is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 9, placing it in bottom 44%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $355.04 million, making it one of the average sized ETFs attempting to match the performance of the Technology - Software segment of the equity market. IGPT seeks to match the performance of the STOXX WORLD AC NEXGEN SOFTWARE DEV ID before fees and expenses.
The STOXX World AC NexGen Software Development Index is comprised of companies with significant exposure to technologies or products that contribute to future software development through direct revenue.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.60%, making it on par with most peer products in the space.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, 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 61.20% of the portfolio. Telecom and Healthcare round out the top three.
Looking at individual holdings, Alphabet Inc (GOOGL) accounts for about 8.32% of total assets, followed by Advanced Micro Devices Inc (AMD) and Meta Platforms Inc (META).
The top 10 holdings account for about 59.11% of total assets under management.
Performance and Risk
The ETF return is roughly 5.44% and it's up approximately 0% so far this year and in the past one year (as of 08/07/2024), respectively. IGPT has traded between $30.45 and $49.76 during this last 52-week period.
The ETF has a beta of 1.03. With about 99 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco AI and Next Gen Software 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, IGPT is a great 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.
SPDR S&P Software & Services ETF (XSW) tracks S&P Software & Services Select Industry Index and the iShares Expanded Tech-Software Sector ETF (IGV) tracks S&P North American Technology-Software Index. SPDR S&P Software & Services ETF has $338.25 million in assets, iShares Expanded Tech-Software Sector ETF has $6.26 billion. XSW has an expense ratio of 0.35% and IGV charges 0.41%.
Bottom Line
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.
Get it free >>Invesco AI and Next Gen Software ETF (IGPT): ETF Research Reports
Advanced Micro Devices, Inc. (AMD) : 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
