Investors looking for a basket of companies with exposure to fast-growing technology themes can consider the iShares Exponential Technologies ETF (NasdaqGS: XT).
The $2.22 billion XT, which recently turned three years old, “seeks to track the investment results of an index composed of developed and emerging market companies that create or use exponential technologies,” according to iShares.The ETF tracks the Morningstar Exponential Technologies Index and holds nearly 200 stocks.
“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 BlackRock.
Inside The Index
“The Morningstar Exponential Technologies Index focuses on finding high-growth companies that are in the early stages of developing technologies that are expected to have a broad impact on society and transform how we live and work,” said Morningstar in a recent note. “The index, which comprises 200 stocks, differs from other tech-focused indexes in a few important ways. For one, the holdings are not limited to the tech sector. They can come from any sector, as long as they are poised to benefit from one or more of the exponential tech themes.”
At the sector level, XT is heavily allocated to technology and healthcare names as those sectors combine for over 63% of the ETF’s weight. None of the ETF’s holdings command weights of over 0.78%. Netflix, Inc. (NASDAQ:NFLX) is XT’s largest individual holding. Within its sector weights, XT features exposure to fast-growing themes, including 3D printing, robotics, clean energy and fintech, among others.
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Robotics “deals with the design, construction, operation, and application of robots. Advances in robotics, specifically when combined with other exponential technologies, have seemingly infinite potential applications, spanning technology, industrial, medical, and consumer-facing channels,” according to Morningstar.
XT charges 0.47% per year, or $47 on a $10,000 investment. The ETF is up about 3% year-to-date.
For more information on the tech sector, visit our technology category.