iShares US Technology ETF

IYW

Market cap $19.5B

Launched on May 15, 2000, the iShares U.S. Technology ETF (IYW) is a passively managed exchange traded fund designed to provide a broad exposure to the Technology - Broad segment of the equity market.

Tech sector leadership is bifurcating, with AI chipmakers like NVDA, AMD, and AVGO outperforming while SaaS and software providers face headwinds. Meta Platforms and Google have justified aggressive AI CapEx by demonstrating tangible ROI in their core ad businesses, supporting elevated valuations.

FTEC carries a much lower expense ratio and slightly higher dividend yield than IYW. IYW posted higher one- and five-year total returns, but FTEC showed a smaller maximum drawdown over five years.

VGT charges a much lower expense ratio and offers a higher yield than IYW. IYW has delivered stronger five-year growth, but with a slightly higher drawdown and greater volatility.

XLK charges a much lower expense ratio and has a higher dividend yield than IYW Both ETFs have delivered nearly identical 1-year returns, but XLK experienced a smaller five-year drawdown IYW holds more stocks and has a modest tilt toward communication services, while XLK stays tightly focused on the S&P 500's tech sector These 10 Stocks Could Mint the Next Wave of Millionaires ›

Designed to provide broad exposure to the Technology - Broad segment of the equity market, the iShares U.S. Technology ETF (IYW) is a passively managed exchange traded fund launched on May 15, 2000.

BlackRock's extensive ETF lineup, comprising roughly 200 funds, is offering a broad view of how long-term thematic and sector exposures have evolved.

I rate both IYW and IGM as buys, but prefer IGM for its superior diversification and lower valuation multiples amid heightened market concentration. IGM offers broader exposure with 277 holdings and a 26.43% top 3 weight, versus IYW's 140 holdings and 44.85% top 3 concentration. IGM's lower P/E (28.79) and P/B (7.70) versus IYW (P/E 29.36, P/B 8.31) provide a better risk/reward profile in today's high-multiple environment.

AI stocks stay elevated as FOMO drives momentum, but strong earnings ease bubble worries. Here's why risks remain -- and the ETFs best positioned to benefit.

ETFs like XLG provide a diversified way to benefit from the Mag 7's Q3 earnings surge and the positive momentum expected going forward.