IYW vs. FTEC: Which Diversified Technology ETF Is the Better Buy for Investors?
IYW vs. FTEC: Which Diversified Technology ETF Is the Better Buy for Investors?
Publish Date: 2026-01-31 16:26:00
Source Domain: www.theglobeandmail.com
Key Points
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FTEC carries a much lower expense ratio and slightly higher dividend yield than IYW.
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IYW posted higher one- and five-year total returns, but FTEC showed a smaller maximum drawdown over five years.
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FTEC holds twice as many stocks, with both funds dominated by Nvidia, Microsoft, and Apple.
This comparison looks at two popular U.S. technology ETFs: the iShares US Technology ETF(NYSEMKT:IYW)and the Fidelity MSCI Information Technology Index ETF(NYSEMKT:FTEC), both of which track the broader technology sector.
While both funds provide exposure to tech giants, they differ in cost, diversification, and recent performance.
Snapshot (cost & size)
| Metric | IYW | FTEC |
|---|---|---|
| Issuer | iShares | Fidelity |
| Expense ratio | 0.38% | 0.08% |
| 1-yr return (as of Jan. 27, 2026) | 23.85% | 20.71% |
| Dividend yield | 0.14% | 0.43% |
| AUM | $21 billion | $17 billion |
| Beta (5Y monthly) | 1.26 | 1.28 |
Beta measures price volatility relative to the S&P 500. The 1-yr return represents total return over the trailing 12 months.
FTEC has the edge in both fees and income, with a lower expense ratio and a higher dividend yield. This could appeal to investors focused on reducing expenses or building a stream of passive dividend income.
Performance & risk comparison
| Metric | IYW | FTEC |
|---|---|---|
| Max drawdown (5 y) | -39.44% | -34.95% |
| Growth of $1,000 over 5 years | $2,283 | $2,133 |
What’s inside
FTEC is built for broad coverage of U.S. information technology, with 289 holdings from various corners of the tech sector. Its top positions are Nvidia, Microsoft, and Apple, and there are no unusual features or quirks to consider.
IYW is also targeted toward the broader tech sector, but it contains only 141 stocks. Its top three holdings match FTEC’s, but these three stocks make up a slightly larger proportion of the portfolio compared to FTEC.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
FTEC and IYW are both broad tech-centered funds that encompass a large swath of the tech industry. FTEC shines with its diversification, but IYW’s more…
