The iShares Expanded Tech-Software Sector ETF (IGV) was launched on 07/10/2001, and is a passively managed exchange traded fund designed to offer broad exposure to the Technology - Software segment of the equity market.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Technology - Software is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 3, placing it in top 19%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $10.61 billion, making it one of the largest ETFs attempting to match the performance of the Technology - Software segment of the equity market. IGV seeks to match the performance of the S&P North American Technology-Software Index before fees and expenses.
The S&P North American Expanded Technology Software Index comprises of North American equities in the software industry and select North American equities from interactive home entertainment and interactive media and services industries.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.41%, making it one of the cheaper products in the space.
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 97.70% of the portfolio.
Looking at individual holdings, Oracle Corp (ORCL) accounts for about 8.61% of total assets, followed by Microsoft Corp (MSFT) and Salesforce Inc (CRM).
The top 10 holdings account for about 59.01% of total assets under management.
Performance and Risk
The ETF return is roughly 4.19% and is up about 21.47% so far this year and in the past one year (as of 02/05/2025), respectively. IGV has traded between $77.36 and $110.05 during this last 52-week period.
The ETF has a beta of 1.09 and standard deviation of 27.12% for the trailing three-year period, making it a high risk choice in the space. With about 127 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Expanded Tech-Software Sector ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IGV is an outstanding 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.
Invesco AI and Next Gen Software ETF (IGPT) tracks STOXX WORLD AC NEXGEN SOFTWARE DEV ID and the SPDR S&P Software & Services ETF (XSW) tracks S&P Software & Services Select Industry Index. Invesco AI and Next Gen Software ETF has $441.40 million in assets, SPDR S&P Software & Services ETF has $569.30 million. IGPT has an expense ratio of 0.58% and XSW charges 0.35%.
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.
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Get it free >>iShares Expanded Tech-Software Sector ETF (IGV): ETF Research Reports
Microsoft Corporation (MSFT) : Free Stock Analysis Report
Salesforce Inc. (CRM) : Free Stock Analysis Report
Oracle Corporation (ORCL) : Free Stock Analysis Report
SPDR S&P Software & Services ETF (XSW): ETF Research Reports
Invesco AI and Next Gen Software ETF (IGPT): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
