Should You Invest in the iShares Expanded Tech-Software Sector ETF (IGV)?

The iShares Expanded Tech-Software Sector ETF (IGV) was launched on 07/10/2001, and is a passively managed exchange traded fund designed to offer broad exposure to the Technology - Software segment of the equity market.

Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.

Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Software is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 6, placing it in top 38%.

Index Details

The fund is sponsored by Blackrock. It has amassed assets over $9.17 billion, making it one of the largest ETFs attempting to match the performance of the Technology - Software segment of the equity market. IGV seeks to match the performance of the S&P North American Technology-Software Index before fees and expenses.

The S&P North American Expanded Technology Software Index comprises of North American equities in the software industry and select North American equities from interactive home entertainment and interactive media and services industries.

Costs

When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

Annual operating expenses for this ETF are 0.41%, making it on par with most peer products in the space.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Information Technology sector--about 97% of the portfolio.

Looking at individual holdings, Oracle Corp (ORCL) accounts for about 8.65% of total assets, followed by Microsoft Corp (MSFT) and Salesforce Inc (CRM).

The top 10 holdings account for about 59.26% of total assets under management.

Performance and Risk

The ETF has lost about -10.62% and is up roughly 5.66% so far this year and in the past one year (as of 04/10/2025), respectively. IGV has traded between $77.36 and $110.05 during this last 52-week period.

The ETF has a beta of 1.17 and standard deviation of 27.59% for the trailing three-year period, making it a high risk choice in the space. With about 124 holdings, it effectively diversifies company-specific risk.

Alternatives

IShares Expanded Tech-Software Sector ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IGV is a great option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.

Invesco AI and Next Gen Software ETF (IGPT) tracks STOXX WORLD AC NEXGEN SOFTWARE DEV ID and the SPDR S&P Software & Services ETF (XSW) tracks S&P Software & Services Select Industry Index. Invesco AI and Next Gen Software ETF has $376.56 million in assets, SPDR S&P Software & Services ETF has $446.49 million. IGPT has an expense ratio of 0.58% and XSW charges 0.35%.

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research