Morningstar Rating

ETF Research and Analysis

by Robert Goldsborough
Suitability
IShares North American Tech ETF 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 83% 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 3.2% in 2015, 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 erode a company's economic moat.
A pullback in IT spending could weigh on the performance of this ETF. Some of this ETF's companies will be negatively affected by what many are calling a secular decline in PC demand. Read more 

This ETF's Index Is a Victim of Its Own Success 
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