ETF Talk: Yearning for Familiarity in a Mired Market

Former French General Charles de Gaulle famously stated, “There can be no prestige without mystery, for familiarity breeds contempt.”

While I agree that a little mystery can be titillating, I do not like much mystery when it comes to money. So, in that sense, familiarity breeds favor, more than contempt.

The market has become saturated with questions, concerns and the dreaded tariffs, which has left investors feeling unsettled — to say the least. Without delving too deeply into the human psyche, it is safe to say that in times of uncertainty, most tend to seek solace in what is familiar. For our purposes, that would be the tech sector. While the sector itself has seen its fair shares of ebbs and flows, it is safe to say it is not going anywhere.

This brings us to the iShares Expanded Tech-Software Sector ETF (IGV). IGV is a passively managed fund that offers interested investors diverse exposure to the North American software industry.

Unlike some tech funds, IGV caps its individual security weights at 8.5%, allowing broader exposure to a concentrated industry. Moreover, the fund works to distribute its portfolio away from tech giants and into smaller, more growth-oriented companies.

While the fund seeks to track the investment results of an index composed of North American equities in the software industry and select North American equities from interactive home entertainment and interactive media and services industries, it also offers interested investors exposure not just to cloud computing as a service, but cloud-computing stocks, themselves.

Bringing back to mind that familiarity breeds favor, in the monetary sense, tech has always been a finance-infused sector, and IGV is no exception. Not only has the fund skyrocketed 372.3% for the 10-year period ending April 1, 2025, but it is up roughly 5.66% so far this year.

IGV is trading just under $105, which puts it at the higher end of its last 52-week trading period, which ranged from $77.76 to $110.05. Moreover, the fund has net assets of $11.08 billion and assets under management of $11.43 billion. Just to sweeten the already saccharine pot, IGV has a modest expense ratio of 0.41%, making it one of the more affordable ETFs in its sector.

Courtesy of Stockcharts.com

As the chart shows, this fund has maintained its overall upward trend over the last year and is doing well despite see-sawing tariff talk from the White House. Its strong bounce back from the “Liberation Day” downswing reflects the strength of the tech sector.

The fund’s primary allocation is in the Information Technology Sector, which makes roughly 97% of its portfolio. Its top 10 holdings include Palantir Technologies Inc. (PLTR), 8.29%; Microsoft Corporation (MSFT), 8.15%; Salesforce, Inc. (CRM), 7.72%; Oracle Corporation, (ORCL), 7.44%; ServiceNow, Inc. (NOW), 6.72%; Adobe Inc. (ADBE), 5.57%; Intuit Inc. (INTU), 4.46%; Palo Alto Networks, Inc. (PANW), 4.36%; CrowdStrike Holdings, Inc. (CRWD), 3.72% and Strategy Incorporated, (MSTR), 3.19%.

Ultimately, the iShares Expanded Tech-Software ETF (IGV) may be just the type of comfort food interested investors are craving, especially given its ample fund and modest expense ratio. Not only does it offer exposure to a familiar facet of the market, but it can act as a segue into cloud-computing stocks, as well. Suffice to say, in a market mired in unfamiliarity and unease, familiarity may breed anything but contempt.

Regardless, interested investors should always do their due diligence before adding any stock, fund or ETF to their portfolio. As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.