iShares US Tech Independence Focused ETF

IETC

Market cap $911M

IETC's active, data-driven strategy and focus on US tech leaders have delivered strong outperformance versus peers and the S&P 500. Top holdings like Broadcom, NVIDIA, Microsoft, and Palantir are benefiting from robust AI demand, driving portfolio returns. The ETF boasts a low expense ratio, strong liquidity, and a superior Quant score, making it attractive for growth-focused investors.

PLTR tops $1B in Q2 revenues for the first time, fueling ETFs like PLTU, IGV, IETC, and SHLD that are tied to the stock's surge.

IETC offers focused exposure to top US tech and AI leaders, with a relatively low expense ratio for a thematic ETF. We are bullish on the fund's top holdings—Broadcom, Nvidia, and Palantir—due to their strong AI leadership and growth prospects. Valuation analysis shows most top holdings are overvalued versus historical norms, with only Nvidia near fair value.

The S&P 500 (^GSPC -0.23%) has plunged by as much as 20% since hitting a record high just two months ago. President Donald Trump enacted sweeping tariffs on all of America's trading partners last week, and many countries responded with plans for retaliatory tariffs of their own, which is stoking fears of a global trade war.

I initiate coverage of iShares U.S. Tech Independence Focused ETF with a hold rating due to expected further downside and recession risks. IETC's strategy of investing in U.S.-focused tech companies is promising, but waiting for a market bottom-out is advisable to avoid potential losses. Despite the recent selloff, valuations remain above long-term averages, and technical indicators suggest limited recovery potential with high downside momentum.

BlackRock (NYSE: BLK) oversees more than $11.6 trillion worth of client money, making it the largest asset manager in the world. Around $3.5 trillion of that is invested in exchange-traded funds (ETFs) which are operated by its iShares subsidiary.

BlackRock is the world's largest asset manager, with $11.5 trillion in client money under its supervision. Around $3.3 trillion of that is sitting in exchange-traded funds (ETFs) that are operated by the company's iShares subsidiary.

IETC has delivered a strong total return of 287% since its inception in 2018, outperforming major technology funds like QQQ and XLK. The fund's high exposure to software and semiconductor stocks positions it well for continued growth driven by AI advancements. Despite its strong performance, IETC's valuation is not cheap, and investors should consider waiting for a better entry point.

iShares U.S. Tech Independence Focused ETF targets U.S.-based tech companies using alternative data, emphasizing long-term growth in a digital economy. IETC's portfolio is AI-driven, with top holdings like Broadcom, Amazon, Microsoft, and Nvidia, presenting both risks and opportunities. Valuation metrics suggest a forward P/E ratio of 27.56x and an IRR potential of 8-11%, but active management adds uncertainty.

Halfway through the year, thematic equity ETFs have exhibited wide levels of dispersion but continue to capture the market's attention heading into the second half of 2024.