Technology, the largest sector weight in the S&P 500, has lagged some other sectors this year, notably utilities and energy. However, the Technology Select Sector SPDR (NYSEArca: XLK) is up 11.5% year-to-date, or about 340 basis points more than the S&P 500.
Investors looking for something a bit more exotic than the standard U.S.-focused technology ETF have options, including an overlooked but solid one in the form of the iShares Global Tech ETF (NYSEArca: IXN).
Putting a finger on IXN’s anonymous status relative to other tech ETFs is a difficult task. After all, the ETF is not small nor is it new. Nearly 13 years old, IXN is home to $723.7 million in assets under management.
More important than those aesthetic superlatives is IXN’s status as a credible ETF for gaining exposure to Apple (NasdaqGS: AAPL). That is a good trait to ETF when Apple is up 24.4% in the past 90 days and flirting with all-time highs. IXN allocates 13.3% of its weight to Apple. Not only is that more than 530 basis points than IXN’s weight to Microsoft (NasdaqGS: MSFT), that is one of the largest weights to the iPad maker of any ETF. [Investors Return to Apple ETFs]
There are reasons to consider IXN beyond its Apple exposure and its 10.5% year-to-date gain. IXN, like several other more well-known tech ETFs, has benefited this year not only from its Apple exposure, but its exposure to suddenly resurgent old line tech stocks. [Your Grandparents Would Like This Tech ETF]
IXN’s combined weight to Microsoft, Intel (NasdaqGS: INTC) and Cisco (NasdaqGS: CSCO) is 15%. Those happen to be three of just six members of the Dow Jones Industrial Average that are up at least 10% this year.
As for IXN’s global element, investors are not incurring a significant in risk or volatility with this ETFs. IXN’s three-year standard deviation is 13.87% compared to 14.55% for the iShares U.S. Technology ETF (NYSEArca: IYW), according to iShares data.
The U.S. is over 77% of IXN’s country weight with other developed market allocations including a combined 10.2% to Japan, Germany, the Netherlands and Sweden.
IXN’s emerging markets exposure comes by way of a combined 7.3% weight South Korea and Taiwan, two of the lowest beta and most tech-heavy developing markets. [Tech Ties Lift Taiwan ETF]
iShares Global Tech ETF
Tom Lydon’s clients own shares of Apple and Microsoft.