Launched on May 15, 2000, the iShares U.S. Technology ETF (IYW) is a passively managed exchange traded fund designed to provide a broad exposure to the Technology - Broad 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.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 1, placing it in top 6%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $24.46 billion, making it one of the largest ETFs attempting to match the performance of the Technology - Broad segment of the equity market. IYW seeks to match the performance of the Dow Jones U.S. Technology Index before fees and expenses.
The Russell 1000 Technology RIC 22.5/45 Capped Index includes companies in the following sectors: software and computer services and technology hardware and equipment. The Index is capitalization-weighted and includes only companies in the technology industry of the Dow Jones U.S. Total Market Index.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.38%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.11%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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 84.7% of the portfolio. Telecom and Industrials round out the top three.
Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 16.87% of total assets, followed by Apple Inc (AAPL) and Alphabet Inc Class A (GOOGL).The top 10 holdings account for about 63.06% of total assets under management.
Performance and Risk
The ETF has added roughly 21.95% and was up about 47.01% so far this year and in the past one year (as of 06/24/2026), respectively. IYW has traded between $170.16 and $259.94 during this last 52-week period.
The ETF has a beta of 1.36 and standard deviation of 23.67% for the trailing three-year period, making it a medium risk choice in the space. With about 144 holdings, it effectively diversifies company-specific risk.
Alternatives
iShares U.S. Technology ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IYW 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.
State Street Technology Select Sector SPDR ETF (XLK) tracks Technology Select Sector Index and the Vanguard Information Technology Index Fund ETF Shares (VGT) tracks MSCI US Investable Market Information Technology 25/50 Index. State Street Technology Select Sector SPDR ETF has $129.47 billion in assets, Vanguard Information Technology Index Fund ETF Shares has $141.46 billion. XLK has an expense ratio of 0.08%, and VGT charges 0.09%.
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.
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iShares U.S. Technology ETF (IYW): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).