Morningstar Rating

ETF Research and Analysis

by Robert Goldsborough
IShares North American Tech-Software IGV offers investors exposure to software companies--specifically, companies that produce client-server, enterprise, Internet, PC, and entertainment software. As a subsector-specific   Read more 

Bull Case

Most of the firms in this fund have healthy balance sheets, which should support continued investment in R&D and growth strategies.
Large-cap software firms with significant competitive advantages (like high switching costs and steady maintenance revenues) serve as the cornerstone of the portfolio. In fact, wide- and narrow-moat firms comprise about 45% and 34% of total assets, respectively.
Major players like Microsoft and Oracle have done a solid job shoring up their defenses and providing paths forward in a world of cloud computing and mobile devices. Read more 

Bear Case

There are several technology ETFs available that provide similar exposure and charge fees that are less than one third of this fund’s expense ratio.
A pullback in IT spending could weigh on the performance of this ETF.
Cloud computing is a disruptive force, and large software providers have had to develop new products that will likely cannibalize their legacy businesses. Read more 

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