Morningstar Rating

ETF Research and Analysis

by Robert Goldsborough
Suitability
IShares North American Technology IGM offers investors broad exposure to the technology sector. This sector-specific exchange-traded fund should be viewed as a tactical investment, suitable only for the satellite portion   Read more 

Bull Case

This fund has a very high-quality portfolio. About 84% of IGM's investments are in companies that have economic moats, or firms that our equity analysts believe have durable competitive advantages.
The top holdings in this fund have strong balance sheets, which should support continued investment in research-and-development and growth strategies.
IT spending has been generally resilient, and worldwide it is forecast to grow 3.1% in 2014, according to the Gartner Group. Read more 

Bear Case

This ETF is expensive. Competing Tech SPDR and Vanguard ETFs carry price tags that are less than half of the cost of this fund.
The companies in this ETF operate in highly competitive industries characterized by rapid innovation that could quickly erode a company's economic moat.
In the longer term, cloud computing and virtualization are expected to be the next industry game-changers, and major players such as Microsoft, Oracle, IBM, and EMC will have to develop new products that likely will cannibalize their legacy businesses. Read more 

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Broad Fixed-Income Exposure At a Low Cost 
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