BlackRock’s (NYSE: BLK) iShares unit, the world’s largest issuer of exchange traded funds, and Ric Edelman’s Edelman Financial Services, one of the largest independent registered investment advisory firms, have partnered to introduce the the iShares Exponentia lTechnologies ETF(NYSEArca:XT).
The new ETF, which began trading on March 23 with over $10.3 million in assets, tracks the Morningstar Exponential Technologies Index.
“XT is designed to provide global exposure to companies identified as leaders across key areas of technological transformation from big data and analytics to nanotechnology and bioinformatics. These companies, which also cross industry sectors such as manufacturing, financial services and healthcare, have the potential to profoundly transform society and may offer substantial investment growth opportunities,” according to a statement issued by BlackRock.
XT is home to 200 stocks, over two-thirds of which are U.S. companies. The new ETF’s other country weights range from 1.1% for India to 5.1% for the U.K.
“We believe exposure to exponential technologies is an important part of a globally diversified portfolio, and we are excited that our clients will have efficient access to some of the leading companies in this area through this ETF. BlackRock’s leadership position in the ETF marketplace, Morningstar’s research and index-building capabilities, and the outstanding reputation and high fiduciary standards of both firms give us additional confidence in this investment opportunity,” said Edelman in the statement.
Edelman has been ranked the top independent financial advisor by Barron’s three times. His firm has risen to prominence, in part, because it embraces investors with smaller accounts, a demographic often underserved by traditional RIAs looking only for investors with $500,000, $1 million or larger accounts. The minimum to open an account with Edelman is $5,000. The firm has more than 40 offices in 15 states.
XT’s take on “exponential technologies” does not mean the ETF is a tech sector ETF in disguise. While tech stocks do account for nearly a third of the new ETF’s weight, XT also features a 29% allocation to the healthcare sector.
Six of the new ETF’s top 10 holdings are healthcare stocks, including Pharmacyclics (NasdaqGS: PCYC), which AbbVie (NYSE: ABBV) said it will acquire earlier this month. XT’s other top healthcare holdings include Valeant Pharmaceuticals (NYSE: VRX) and Endo International (NasdaqGS: ENDP), which recently tussled for Salix Pharmaceuticals (NasdaqGS: SLXP). [Salix Bidding War Lifts Pharma ETFs]
XT also holds stakes in Internet high-fliers such as Netflix (NasdaqGS: NFLX) and Amazon (NasdaqGS: AMZN) as well as Dow components Apple (NasdaqGS: AAPL) and Boeing (NYSE: BA). The new ETF also allocates 0.52% of its weight to shares of BlackRock.
XT charges 0.47% per year.
XT Sector Weights
Chart Courtesy: iShares
Tom Lydon’s clients own shares of Apple.