iShares S&P Global TechnologyIXN

Morningstar Rating

ETF Research and Analysis

by Robert Goldsborough

Suitability
Investors seeking broad exposure to the global technology sector should consider iShares S&P Global Technology Sector Index IXN. This sector-specific exchange-traded fund should be viewed as a tactical investment, suitable Read more

Bull Case

This fund has a very high-quality portfolio. Some 73% of IXN's investments are in companies that have economic moats or 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.

Longer-term, the secular story for IT spending looks compelling. 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.

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