ETF Spotlight on the iShares Dow Jones U.S. Technology Sector Index Fund (NYSEArca: IYW), part of an ongoing series.
Assets: $1.87 billion.
Objective: The iShares Dow Jones U.S. Technology Sector Index Fund tries to reflect the performance of the Dow Jones U.S. Technology Index, which tracks the U.S. tech sector, including areas like software, computer services, technology hardware and equipment.
Holdings: Apple (NasdaqGS: AAPL) 16.9%, Microsoft (NasdaqGS: MSFT) 9.9%, Google (NasdaqGS: GOOG) 8.8%, International Business Machines (NYSE: IBM) 8.6% and Oracle (NasdaqGS: ORCL) 5.1%. [Lagging Tech Sector ETFs Need Apple Turnaround]
What You Should Know:
- BlackRock’s iShares sponsors the fund.
- IYW has a 0.46% expense ratio.
- The fund has 136 holdings and the top ten make up 67.2% of the overall portfolio.
- The ETF has a 1.04% 12-month yield.
- Sub-sector allocations include Technology Hardware & Equipment 51.8%, Software & Computer services 48.0%.
- IYW is up 1.8% over the past month, up 2.5% over the last three months and up 4.9% year-to-date.
- The fund is 3.8% above its 200-day exponential moving average.
- “IYW has a very high-quality portfolio–wide-moat and narrow-moat firms account for about 49% and 39% of the portfolio, respectively. In other words, Morningstar’s equity analysts believe that about 88% of the assets that comprise this portfolio are invested in companies with sustainable competitive advantages,” according to Morningstar analyst Robert Goldsborough.
Next Page: The latest news on the tech sector.
The Latest News:
- Technology stocks lead the broader markets Friday as the S&P 500 tops 1,600. [Technology ETF: Loser Becomes Leader?]
- Tech companies are trading at cheap valuations compared to non-cyclical sector stocks as investors piled into dividend-yielding utilities and consumer staples.
- “You have these tech companies that have double-digit earnings growth, no debt, huge cash balances and they’re trading at 12 times forward earnings, while you have a utility in Ohio at 16 times earnings,” James Swanson, chief investment strategist at MFS Investment Management, said in a Wall Street Journal article. “If you don’t think there’s a recession coming, how far do you go with this game?”
- Nevertheless, tech firms are also jumping on the dividend train as more start giving back to shareholders from their copious cash hoards.
iShares Dow Jones U.S. Technology Sector Index Fund
For past stories in this series, visit our ETF Spotlight category.
Max Chen contributed to this article.