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The iShares Expanded Tech Sector ETF (NYSEMKT: IGM) has been a strong performer, delivering a 10.3% compound annual return as its inception in 2001. That’s a solid win over the S&P 500 (SNPINDEX: ^GSPC), which averaged 7.8% over the same period.But can it turn $250,000 into $1 million? Let’s dive in.
This ETF focuses on the broader technology landscape, successfully navigating booms driven by the internet, enterprise software, and cloud computing. Now, its top holdings are heavily invested in artificial intelligence (AI), potentially the most valuable prospect in tech history.
The iShares Expanded Tech Sector ETF boasts a diverse portfolio of 283 stocks, with a meaningful emphasis on companies leading the AI revolution. The top five holdings are:
These giants represent a combined 41.7% of the fund’s value, making it a top-heavy ETF. Tho, the fund also includes a wide range of companies successfully integrating AI into their operations.
AI Leaders Within the ETF
Here’s a glimpse at some of the other key players in the iShares Expanded Tech Sector ETF and their portfolio weighting:
| Company Stock | iShares ETF Portfolio Weighting |
|---|---|
| Netflix | 3.78% |
| Salesforce | 2.15% |
| Oracle | 1.89% |
| Adobe | 1.38% |
| Advanced Micro Devices | 1.29% |
| Palo Alto Networks | 1.01% |
| CrowdStrike | 0.84% |
| Atlassian | 0.30% |
| Datadog | 0.26% |
| Docusign | 0.14% |
Data source: iShares. Portfolio weightings are accurate as of April 17, 2025, and are subject to change.
How Companies are Leveraging AI
let’s look at how some of these companies are using AI to drive growth:
- Netflix: AI powers its recommendation engine, boosting user engagement.
- Oracle: Operates leading data centers for AI development, serving clients like OpenAI and Meta.
- Advanced Micro Devices (AMD): Making powerful AI chips for data centers and personal computers.
- Palo Alto Networks & CrowdStrike: Integrating AI into cybersecurity products for threat detection and incident response.
The Potential for Growth
The iShares Expanded Tech Sector ETF has a strong track record. While it has delivered a compound annual return of 10.3% as 2001, that return accelerated to 18.7% over the past decade, fueled by enterprise software, cloud computing, and now, AI. With strategic investments in AI, the iShares Expanded Tech Sector ETF could be a compelling option for long-term growth.
The iShares Expanded Tech Sector ETF (IGM) has caught the eye of investors seeking exposure to the dynamic technology market. But is it a golden ticket to financial success? We sat down with seasoned financial analyst, Sarah Chen, to dissect the ETF and discuss its potential for long-term growth.
time.news: Sarah, thanks for joining us.The iShares Expanded Tech Sector ETF (IGM) has shown remarkable returns since its inception. What makes it stand out?
Sarah Chen: Thanks for having me. The IGM ETF [[[2]] has indeed been a strong performer. Its 10.3% compound annual return since 2001, beating the S&P 500’s 7.8% over the same period, is certainly noteworthy. What differentiates it is its focus on the expanded tech sector.It isn’t just about hardware or software; it encompasses a wider range of tech-driven industries. This broad approach has allowed it to capitalize on various tech booms, from the internet to cloud computing.
Time.news: The article highlights the ETF’s meaningful investment in artificial intelligence (AI). How crucial is this for its future performance?
Sarah chen: AI is currently the name of the game and it has the potential for significant growth. The IGM ETF’s top holdings, like Microsoft, Apple, Alphabet, Nvidia, and Meta, are all heavily invested in AI. The concentration in companies that are at the forefront of AI advancement gives the ETF a strong position to benefit from this technological revolution. Though,investors should recognize that AI is still developing and comes with high risks.
Time.news: The ETF holds 283 different stocks. Is this level of diversification beneficial for investors?
Sarah chen: Absolutely. Diversification is crucial for managing risk [[[3]]. While the top five holdings make up a significant portion of the fund (41.7%),the remaining holdings provide exposure to a broad range of companies within the tech sector.That includes companies like Netflix , Salesforce, and Oracle. This diversification can definitely help cushion the impact of any single company’s underperformance.
Time.news: The article mentions that the ETF is “top-heavy.” What are the implications of this concentration in the top holdings?
Sarah Chen: “Top-heavy” means that the performance of the ETF is heavily reliant on the performance of its top holdings. While these are generally strong, established companies, any significant downturn in their performance could disproportionately impact the overall ETF return. Investors need to be aware of this concentration risk and consider if it aligns with their risk tolerance.
Time.news: Beyond the top players, the ETF includes companies like Netflix, Salesforce, Oracle, and others leveraging AI. How are these companies contributing to the ETF’s growth potential?
Sarah Chen: These companies demonstrate the breadth of AI’s impact across industries. Netflix, for example, uses AI to enhance its proposal engine and boost user engagement. Oracle operates data centers crucial for AI development, serving companies like openai and Meta. Furthermore, cybersecurity firms like Palo Alto Networks and CrowdStrike use AI to enhance threat protection. It really underscores how AI is becoming integral to many industries.
Time.news: The growth rate of the iShares Expanded Tech Sector ETF (IGM) has accelerated in the past decade. Is that trend likely to continue?
Sarah Chen: Well, past performance dose not guarantee future results. However, the recent acceleration, fueled by enterprise software, cloud computing, and now AI, suggests a strong growth trajectory. IGM delivered compound annual returns of 10.3% as 2001, but had a 18.7% return over the last decade. As AI continues to permeate various sectors, the IGM ETF is positioned to continue its growth. Of course, market conditions and unforeseen technological disruptions can always impact.
Time.news: What advice would you give to investors considering the IGM ETF?
Sarah Chen: First, understand your own risk tolerance and investment goals. While the IGM ETF has shown strong past performance,it is still subject to market volatility,especially given its focus on the technology sector. second, remember the importance of diversification. While the IGM ETF is diversified within the tech sector, it shouldn’t be the only investment in your portfolio. Make sure you have exposure to other asset classes as well. do your own research and stay informed about the companies within the ETF and the broader tech landscape [[[1]].
Time.news: Thank you for your insights, Sarah.
Sarah chen: My pleasure.