The iShares U.S. Technology ETF (NYSE: IYW) tracks an index of U.S. equities focusing on the tech sector. Exchange-traded funds (ETFs) have had a transformative impact on the investment world. They provide investors access to various investment options covering numerous asset classes, sectors, and geographies.
Facts on the IYW ETF
The IYW ETF is owned by iShares, owned by BlackRock, the company that launched the world’s first index strategy over three decades ago. According to the IYW factsheet, if an investor invested a hypothetical $10K in the ETF in May 2000, the amount would be worth nearly $50K as of September 2023.
IYW ETF Performance
IYW is an ETF whose portfolio comprises the top U.S. tech firms. It currently comprises around 134 stocks. However, its top 10 holdings account for 64.21% of the fund. The biggest holdings are in Apple and Microsoft, accounting for 18.12% and 17.98% of the total, respectively.
Companies in the Technology sector account for 84% of their total holdings, with nearly all of the remaining 16% invested in the Communication Services sector. A small fraction of the ETF is in the Financial Services sector.
Year-to-date, the ETF has grown 56.10% on the back of solid tech sector performance in 2023. For instance, Apple and Microsoft stocks are up 52.51% and 55.66%, respectively.
Besides the ETF growth, it also performs quite well regarding dividend payouts. The annual dividend yield currently stands at 0.35%, while the annual dividend amount is $0.40 per share. Payouts are made quarterly, and the payout ratio currently stands at 12.19%. The ETF has had a dividend growth of 17.79% as of November 2023.
IYW ETF Share Price
The price of the IYW ETF currently stands at $116.73 per share as of November 20, 2023, 10:39 AM EST market open. It has been performing quite well for most of the year, and the price is up 11.70% in the past month alone. Since its launch, the stock has had impressive performance for its investors over the long run. It currently has $11.47 billion in assets under management.
Should You Invest in the IYW ETF?
Stock market analysts give the IYW ETF a strong buy rating. One reason for the high rating is its amazing performance year-to-date. The stock has grown around 56.10% since the start of January 2023. In the past three years, it has delivered a 3-Year Daily Total Return of 13.83% as of November 20, 2023.
Its expense ratio is 0.40%, which could be better but is reasonable. That means for every $10,000 invested in the fund, you would pay $40 in fees every year. While it may seem high, most other tech-based ETFs charge a higher rate. There are also others with a lower rate.
iShares U.S. Technology ETF Forecast
According to Wall Street analysts, the highest price target for the IYW ETF is $150.14, and the lowest is $104.05. The average price target is $126.41, an 8.02% upside from the current price.
Should You Invest in the iShares U.S. Technology ETF
Since the advent of ETFs, many investors have found them to be a convenient and lower-risk alternative to investing in individual stocks. While the returns may not be as high as investing in a single stock, they mitigate any wild swings. If you want to invest in a technology-specific ETF, the IYW ETF is a great option.
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