Morningstar Rating

ETF Research and Analysis

by Robert Goldsborough
Suitability
IShares Global Tech ETF IXN offers broad exposure to the global technology sector. This sector-specific exchange-traded fund is suitable only for the satellite portion of one's portfolio.
The average market capitalization   Read more 

Bull Case

Some 79% of IXN's investments are in companies that have wide or narrow Morningstar Economic Moat Ratings--firms that Morningstar's 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 is forecast to grow 3.2% in 2015, according to the Gartner Group. Read more 

Bear Case

There are several technology ETFs available that provide similar exposure and charge fees that are less than half of this fund's expense ratio.
The companies in this ETF operate in highly competitive industries characterized by rapid innovation that could quickly erode a company's economic moat.
Over 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 will likely cannibalize their legacy businesses. Read more 

Low-Cost Exposure to High-Quality Companies 
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