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Global Tech ETF Tempts


Technology, the largest sector weight in the S&P 500, has lagged some other sectors this year, notably utilities and energy. However, the Technology Select Sector SPDR (XLK) is up 11.5% year-to-date, or about 340 basis points more than the S&P 500.

Investors looking for something a bit more exotic than the standard U.S.-focused technology ETF have options, including an overlooked but solid one in the form of the iShares Global Tech ETF (IXN) .

Putting a finger on IXN’s anonymous status relative to other tech ETFs is a difficult task. After all, the ETF is not small nor is it new. Nearly 13 years old, IXN is home to $723.7 million in assets under management.

More important than those aesthetic superlatives is IXN’s status as a credible ETF for gaining exposure to Apple (AAPL). That is a good trait to ETF when Apple is up 24.4% in the past 90 days and flirting with all-time highs. IXN allocates 13.3% of its weight to Apple. Not only is that more than 530 basis points than IXN’s weight to Microsoft (MSFT), that is one of the largest weights to the iPad maker of any ETF. [Investors Return to Apple ETFs]

There are reasons to consider IXN beyond its Apple exposure and its 10.5% year-to-date gain. IXN, like several other more well-known tech ETFs, has benefited this year not only from its Apple exposure, but its exposure to suddenly resurgent old line tech stocks. [Your Grandparents Would Like This Tech ETF]

IXN’s combined weight to Microsoft, Intel (INTC) and Cisco (CSCO) is 15%. Those happen to be three of just six members of the Dow Jones Industrial Average that are up at least 10% this year.

As for IXN’s global element, investors are not incurring a significant in risk or volatility with this ETFs. IXN’s three-year standard deviation is 13.87% compared to 14.55% for the iShares U.S. Technology ETF (IYW) , according to iShares data.

The U.S. is over 77% of IXN’s country weight with other developed market allocations including a combined 10.2% to Japan, Germany, the Netherlands and Sweden.

IXN’s emerging markets exposure comes by way of a combined 7.3% weight South Korea and Taiwan, two of the lowest beta and most tech-heavy developing markets. [Tech Ties Lift Taiwan ETF]

iShares Global Tech ETF


Tom Lydon’s clients own shares of Apple and Microsoft.