The tech sector has delivered significant growth in the past year and continues to exhibit potential for further gains, owing to the artificial intelligence (AI) boom. Investors seeking exposure to this industry may consider exchange-traded funds (ETFs), a cost-effective and diversified investment vehicle. Using the TipRanks ETF Screener, we have shortlisted two tech ETFs with over 10% upside potential: the iShares U.S. Technology ETF (IYW) and the iShares Expanded Tech Sector ETF (IGM).
Let’s take a closer look at what Wall Street thinks about these two ETFs.
iShares U.S. Technology ETF (IYW)
The IYW ETF seeks to track the performance of Russell 1000 Technology RIC 22.5/45 Capped Index. The ETF provides exposure to U.S. electronics, computer software and hardware, and informational technology companies. IYW has $15.63 billion in assets under management (AUM). Meanwhile, the ETF’s low expense ratio of 0.4% is encouraging. Interestingly, the IYW ETF has generated a return of 60% over the past year.
On TipRanks, IYW has a Moderate Buy consensus rating. This is based on the consensus rating of each stock held in the portfolio. Of the 135 stocks held, 106 have Buys, 27 have a Hold rating, and two stocks have a Sell rating. The average IYW ETF price forecast of $146.46 implies an 11.13% upside potential from the current levels.
iShares Expanded Tech Sector ETF (IGM)
The IGM ETF provides broad exposure to the technology sector, and technology-related companies in the communication services and consumer discretionary sectors. IGM has $4.12 billion in AUM and its expense ratio stands at 0.41%. The IGM ETF has gained 63% in the past year.
Overall, the IGM ETF has a Moderate Buy consensus rating. Of the 280 stocks held, 218 have Buys, 58 have a Hold rating, and four have a Sell rating. The average IGM ETF price forecast of $549.26 implies a 10.1% upside potential from the current levels.
Ending Thoughts
Tech ETFs are an affordable and transparent way to gain exposure to this dynamic industry. Furthermore, these ETFs have better liquidity, making it easier for investors to engage in buy or sell transactions.
