ETF Talk: Expanding Exposure to High-Quality Tech

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker, financial journalist, and money manager.
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The iShares Expanded Tech Sector ETF (NYSE Arca: IGM) tracks a market-cap-weighted index of U.S. and Canadian technology companies.

IGM offers a broad coverage of the North American technology sector. Aside from conventional technology stocks, the fund also includes tech-related stocks from other sectors — specifically internet retail companies.

While IGM is a North American fund, nearly all its assets are allocated to the United States. Seeking to provide a diversified exposure to the tech industry, its market-cap-weighted index caps each security’s weight at 8.5%. The index is reconstituted semi-annually and rebalanced quarterly.

Prior to Dec. 24, 2018, the fund was tracking the S&P North American Technology Index. The change in index was due to a new Communications Services sector developed at the end of 2018.


The fund generally will invest at least 80% of its assets in the component securities of its underlying index and in investments that have economic characteristics substantially identical to the component securities of its index. A significant portion of the underlying index is represented by securities of companies in the technology industry or sector. It is non-diversified.

Top holdings in IGM include Apple, Inc. (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), (NASDAQ: AMZN), Meta Platforms (NASDAQ: META) and Alphabet (NASDAQ: GOOGL), to name just a few of the mega-cap, tech-related stalwarts in this fund.

IGM has $2.5 billion in net assets and a 0.05% average spread. Its expense ratio is 0.40%, meaning it is relatively inexpensive to hold in relation to other exchange-traded funds. IGM share price currently trades around $311, giving it a 0.47% distribution yield.

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However, as with any opportunity, potential investors should conduct their own due diligence in deciding whether or not this fund fits their own individual investing needs and portfolio goals.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

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