Surprise: Tech Stocks Are Reasonably Valued

IYW holds nearly 140 stocks. Apple Inc. (NASDAQ: AAPL) and Microsoft Corp. (NASDAQ: MSFT) combine for over 29% of the ETF’s weight. Overall, technology’s premium to the broader domestic equity market is just 11%, according to BlackRock data. Additionally, many of the largest technology companies are highly profitable.

“With a return-on-equity of 20%, the sector remains profitable relative to both its history as well as the broader market. The current return on equity is six percentage points above the broader market. This compares favorably to the long-term median of around four percentage points,” said BlackRock.

For more information on the tech segment, visit our technology category.

Tom Lydon’s clients own shares of Apple and Microsoft.