A sound investment process and strong management team underpin iShares Expanded Tech-Software Sect ETF's Morningstar Medalist Rating of Silver. The portfolio maintains a cost advantage over competitors, priced within the lowest fee quintile among peers.  

 The strategy's sensible investment philosophy merits an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an underweight position in quality exposure and yield exposure compared with category peers. Low quality exposure is attributed to stocks with higher financial leverage and lower profitability. And a low yield exposure is rooted in holding fewer stocks with high dividend or buyback yields -- instead, typically holding stocks in an early stage of development. The strategy’s management team earns an Above Average People Pillar rating. The strategy's parent organization earns the firm an Above Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

Microsoft

salesforce.com

Oracle

Adobe

Intuit

ServiceNow

Palo Alto Networks

Synopsys

Cadence Design Systems

CrowdStrike

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. iShares Expanded Tech-Software Sect ETF earns an Above Average Process Pillar rating. The most meaningful contributor to the rating is that this fund tracks an index. Historical data, like Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. The firm's five-year retention rate of 92% also buttresses the rating. Lastly, the process is limited by the fund's mediocre long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the process has struggled over that period.

The investment strategy as stated in the fund's prospectus is:  The investment seeks to track the investment results of the S&P North American Expanded Technology Software IndexTM.  The fund generally will invest at least 80% of its assets in the component securities of its underlying index and in investments that have economic characteristics that are substantially identical to the component securities of its underlying index. The index measures the performance of U.S.-traded stocks from the software industry and select companies from the interactive home entertainment and interactive media and services sub-industries in the U.S. and Canada. The fund is non-diversified. 

 The portfolio is overweight in technology by 17.9 percentage points in terms of assets compared with the category average, and its energy allocation is similar to the category. The sectors with low exposure compared to category peers are communication services and consumer cyclical, underweight the average by 6.6 and 4.4 percentage points of assets, respectively. The portfolio is positioned across 118 holdings and is relatively concentrated. Specifically, 59.7% of the fund’s assets are housed within the top 10 holdings, as opposed to the category’s 52.4% average.

Above Average

Process

iShares Expanded Tech-Software Sect ETF's strong equity team drives the strategy's Above Average People Pillar rating. There are three managers listed on the fund: Greg Savage, Jennifer Hsui, Paul Whitehead. Experience on the team is abundant, with 18 years of average portfolio management experience. Together, they manage a total of 258 strategies, with a Silver asset-weighted average Morningstar Medalist Rating, indicating the potential to deliver positive alpha relative to the category median in aggregate.  

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

People

BlackRock offers compelling options across asset classes and vehicles. It earns an Above Average rating for Parent. 
The firm’s approximately USD 8 trillion in assets under management, as of Sept. 30, 2022, gives it unparalleled scale and influence. It is a market-leading index fund provider globally, and its iShares exchange-traded fund franchise offers a low-cost lineup of core funds that investors can use to build a well-diversified portfolio for dirt cheap. The firm can be more adventurous in its ETF launches than some peers, so not everything it launches is appropriate for the masses. As a result, it is likely to have more ETF closures than peers that stick to the basic building blocks.  
The firm’s active fixed-income and multi-asset efforts also stand out as some of the best in the industry. Those benefit from BlackRock’s commitment to building a first-class risk management system via its Aladdin analytics software. The software is also available for sale to other firms and has proved to be a popular option for competitors, a testament to its usefulness. 
More recently, the firm has shifted its focus to ESG offerings and incorporating ESG across its investment lineup, leading to a political backlash in the United States.
BlackRock isn’t the best at everything it tries to do, but retail investors, financial advisors, and large institutions could all build robust portfolios using BlackRock’s products.

Parent

iShares North American Tech-Software ETF

IGV tracks a market-cap-weighted index of US and Canadian software companies.

C3.ai

Asana

Datadog

PagerDuty

Palantir Technologies

Atlassian

Workday

Microsoft stock has gained 5% in 2024 but the IGV software index is down 3%, after falling 7% in April. The bellwether index soared 59% last year amid AI hype.

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AI and vendor consolidation are key drivers for outperforming software companies in the technology industry, and that will continue to be the case in Q1 2024.

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IGV: Priced For Perfection At Technical Resistance (Rating Downgrade)

If you're interested in broad exposure to the Technology - Software segment of the equity market, look no further than the iShares Expanded Tech-Software Sector ETF (IGV), a passively managed exchange traded fund launched on 07/10/2001.

Should You Invest in the iShares Expanded Tech-Software Sector ETF (IGV)?

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NVIDIA

Oracle (ORCL) jumped more than 13% to a record high in yesterday trading session, following the robust third-quarter fiscal 2024 results. Investors seeking to tap the strength should consider ETFs having the largest exposure to this software giant.

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VanEck Vectors Semiconductor ETF

Chip stocks have been crushing software stocks so far this year, and a Jefferies analyst thinks it will take more time for investors in the latter to see the financial benefits of artificial intelligence.

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IGV has growth potential in the software market and its concentration in stable companies may help it withstand tech market volatility. The iShares Expanded Tech-Software Sector ETF is heavily concentrated in its top 10 holdings, which are mostly large cap software companies. IGV had strong performance in 2023, outperforming the S&P 500 and Nasdaq 100.

IGV: A Great Set Of Overvalued Tech Stocks

iShares Expanded Tech-Software Sector ETF has a track record of outperforming peer software ETFs and the S&P 500 Index. IGV has several key holdings, including Salesforce, Adobe, and Oracle, that demonstrate strong growth and profitability, posturing IGV to outperform other peer competitor ETFs looking forward. Despite a low dividend yield and moderate expense ratio, IGV's strong performance and holdings drive it toward a buy rating for investors.

IGV: A Leading Contender Among Software-Focused ETFs

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FMC Excelsior Focus Equity ETF

FT Cboe Vest Technology Dividend Target Income ETF

Oracle (ORCL) provided downbeat revenue guidance, citing strong competition in the cloud-computing industry. However, it beat earnings estimates.

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iShares Expanded Tech-Software ETF has recovered from the 2022 bear-market in the tech sector bear market and gained 35% YTD. Microsoft, the top holding of the ETF, has contributed to its success with a 47% YTD gain. Other top-holding include Adobe, Salesforce.com, and Palo Alto Networks. The ETF sports a high-valuation, but considering that Generative AI is expected to grow at a CAGR of 40%+ over the next decade, I would argue that it should.

IGV: Software ETF Rides AI To +35% YTD Gain

Fidelity MSCI Information Technology Index ETF

iShares Global Tech ETF

Technology Select Sector SPDR Fund

As expected, the Federal Reserve announced on Wednesday that it would keep its benchmark interest rate within the range of 5.25% to 5.50%.

Fed Stays Put: 5 Wining Tech ETFs

Cisco Systems

Dynatrace Inc

Splunk

Software growth stocks outperformed in the first half of 2023. But will the artificial intelligence-driven rally be sustainable for software stocks?

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SPDR Portfolio S&P 500 Value ETF

Financial Select Sector SPDR Fund

Consumer Discretionary Select Sector SPDR Fund

SPDR NYSE Technology ETF

Bank of America's head of US equity & quantitative strategy, Savita Subramanian, offers a reassuring message for equity investors, as quoted on Yahoo Finance.

Is Market Optimism in Cards as Rates Peaking? Top ETFs to Buy

Direxion Daily Cloud Computing Bull 2X Shares

Shares of Oracle Corp. ORCL, -12.14% tumbled 12.1% in midday trading toward its biggest one-day selloff in 21 years in the wake of a disappointing earnings report, and were having an oversized drag on some exchange-traded funds that track both the software and cloud sectors and carry relatively large positions in Oracle's stock. The Fidelity Cloud Computing ETF FCLD, -1.87%, of which Oracle's stock is the most heavily weighted component with a 4.5% weighting, shed 1.9% with 38 of 50 equity components seeing red.

Oracle's big stock selloff acts as a big drag on both software and cloud ETFs

Fidelity Disruptive Technology ETF

iShares Evolved U.S. Technology ETF

Invesco NASDAQ Internet ETF

Salesforce (CRM) reported its second quarter earnings on Wednesday after the bell, recording beats on both lines.

Salesforce Pops on Earnings Strength: ETFs in Focus

iShares Expanded Tech-Software Sector ETF has outperformed the S&P 500 by 150%+ over the past decade. Strong catalysts supporting the software sector include the proliferation of mobile devices, the growth of enterprise software, migration to the cloud, and the emergence of AI. Top holdings in the IGV ETF are increasing margins as they continue to scale up their fast-growing SaaS-based business models.

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Invesco QQQ

Vanguard Information Technology ETF

The stock market has roared back to life in 2023 and has largely outperformed expectations. Investors have begun pouring back into the stock market in search of bargains.

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Principal Healthcare Innovators Index ETF

iShares Focused Value Factor ETF

Invesco S&P MidCap 400 Pure Value ETF

Invesco S&P 500 Pure Value ETF

Invesco S&P SmallCap 600 Pure Value ETF

Invesco S&P 500 Enhanced Value ETF

Vanguard Value ETF

Vanguard Growth ETF

As rising rates are in the cards, value stocks are likely to take a center stage in the near term.

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The innovative technology space may face headwinds due to ongoing recession fears and a potential "baby bubble" in certain speculative areas. IGV has outperformed peers as well as the broader market in recent times, but its top holdings still show concerning valuations and signs of an imminent correction. I rate IGV a Hold, as tech stock prices remain high, but the rally could lose momentum due to the Federal Reserve's hawkish stance.

IGV: Vigilance Required As Technology Speculation Worsens And Rallies Continue

WisdomTree International AI Enhanced Value Fund

WisdomTree US AI Enhanced Valu

American Century Focused Large Cap Value ETF

VanEck Morningstar Global Wide Moat ETF

VictoryShares US Value Momentum ETF

Value stocks and ETFs have historically proven to be a strong investment option during economic slowdown.

Value ETF Investing to Shine as a Slowdown Looms Large

For investors seeking momentum, iShares Expanded Tech-Software Sector ETF IGV is probably on radar. The fund just hit a 52-week high and is up 47.5% from its 52-week low price of $235.41/share.

Software ETF (IGV) Hits New 52-Week High

For investors looking for momentum, iShares Expanded TechSoftware Sector ETF IGV is probably a suitable pick. The fund just hit a 52-week high and is up 48.9% from its 52-week low of $235.41/share.

Technology ETF (IGV) Hits a New 52-Week High

First Trust Cloud Computing ETF

Oracle (ORCL) reported solid fourth-quarter fiscal 2023 results, beating both revenue and earnings estimates. The software giant forecast an upbeat first quarter.

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Global X Robotics & Artificial Intelligence ETF

Roundhill Generative AI & Technology ETF

iShares Robotics & Artificial Intelligence Multisector ETF

iShares U.S. Technology ETF

Invesco Nasdaq 100 ETF

First Trust Nasdaq Artificial Intelligence & Robotics ETF

Invesco S&P 500 Equal Weight Technology ETF

iShares PHLX Semiconductor ETF

Hello! This week's ETF Wrap takes a look at tech-fund demand and performance while highlighting several AI-themed ETFs that have attracted inflows this year.

Tech-related ETFs post huge 2023 gains with boost from AI hype, but some big ones still are left with outflows

Amazon

Global X Cybersecurity ETF

Check Point Software Technologies

CyberArk Software

Fortinet

Alphabet

KnowBe4

Cloudflare

Okta

Ping Identity Holding Corp

Rapid7

Tenable Holdings Inc

Zscaler

Cybersecurity stocks have underperformed in 2023. But cloud security companies may be better positioned as corporate budgets tighten.

News for iShares North American Tech-Software ETF ETF (IGV)