Morningstar Rating

ETF Research and Analysis

by Robert Goldsborough
Suitability
IShares US Technology ETF IYW offers investors broad exposure to the United States technology sector. As a sector-specific exchange-traded fund, IYW should be viewed as a tactical investment, suitable only for the satellite   Read more 

Bull Case

This fund has a very high-quality portfolio. About 88% of IYW's investments are in companies 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 is forecast to grow 3.2% worldwide in 2015, according to the Gartner Group. Read more 

Bear Case

The top 10 holdings account for 63.5% of this fund's portfolio, so this fund's performance and risk attributes are closely tied to just a handful of stocks.
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.
This ETF's expense ratio is much higher than that of competing technology ETFs. Read more 

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