Should You Consider Putting Money Into the Invesco AI and Next Generation Software ETF (IGPT)?

Explore Broad Technology Software Exposure with Invesco AI and Next Gen Software ETF (IGPT)

For investors seeking comprehensive access to the Technology - Software sector, the Invesco AI and Next Gen Software ETF (IGPT) offers a compelling option. This passively managed exchange-traded fund, which began trading on June 23, 2005, is designed to track the performance of the software segment within the equity market.

Why Choose Passively Managed ETFs?

Passively managed ETFs have gained significant traction among both institutional and individual investors. Their popularity stems from benefits such as low fees, transparency, flexibility, and tax advantages, making them an attractive choice for those with a long-term investment horizon.

Advantages of Sector ETFs

Sector-focused ETFs provide a straightforward way to achieve diversified exposure to a wide range of companies within a specific industry, reducing the risk associated with individual stocks. The Technology - Software sector is one of 16 major categories in the Zacks Industry classification, currently ranked sixth, placing it in the top 38% of all sectors.

Key Facts About the Index

Managed by Invesco, the fund has accumulated over $712 million in assets, positioning it as a mid-sized ETF within its category. The IGPT ETF aims to replicate the performance of the STOXX WORLD AC NEXGEN SOFTWARE DEV ID index, before fees and expenses are considered.

The underlying index, STOXX World AC NexGen Software Development, is composed of companies that generate substantial revenue from technologies or products that drive the future of software development.

Understanding Costs

Expense ratios are a crucial consideration when selecting an ETF. Lower-cost funds can outperform more expensive alternatives if all other factors are equal. IGPT’s annual operating expense is 0.56%, which is comparable to similar funds in the sector.

The ETF also offers a 12-month trailing dividend yield of 0.04%.

Sector Allocation and Top Holdings

Before investing, it’s essential to review an ETF’s portfolio. While ETFs offer diversification and transparency, understanding their holdings can help manage risk. IGPT allocates approximately 63.7% of its assets to the Information Technology sector, with Telecom and Industrials also among the top allocations.

Among individual holdings, Micron Technology Inc (MU) represents about 10.43% of the fund’s assets, followed by Sk Hynix Inc and Nvidia Corp (NVDA). The top ten holdings collectively make up roughly 62.82% of the fund’s total assets.

Performance and Risk Metrics

So far this year, the Invesco AI and Next Gen Software ETF has gained around 7.26%, and over the past 12 months (as of 02/25/2026), it has risen by approximately 38.22%. During the last year, IGPT’s price has ranged between $35.18 and $66.60.

The ETF’s three-year beta is 1.13, with a standard deviation of 25.62%, indicating a moderate risk profile. With a portfolio of about 114 holdings, the fund offers broad diversification to mitigate company-specific risks.

Other ETF Alternatives

IGPT holds a Zacks ETF Rank of 2 (Buy), reflecting factors such as expected returns, cost, and momentum. It stands out as a strong choice for investors targeting the Technology ETF space, but there are additional options to consider:

• State Street SPDR S&P Software & Services ETF (XSW) tracks the S&P Software & Services Select Industry Index and manages $352 million in assets, with an expense ratio of 0.35%.
• iShares Expanded Tech-Software Sector ETF (IGV) follows the S&P North American Technology-Software Index, holds $7.67 billion in assets, and charges a 0.39% expense ratio.

Conclusion

To further explore IGPT and other ETF options, consider using screening tools to find products that align with your investment goals and stay informed with the latest ETF news. Visit the Zacks ETF Center for more information.

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For more detailed analysis, see the Invesco AI and Next Gen Software ETF (IGPT): ETF Research Reports.

This article is based on research from Zacks Investment Research. For more resources, visit Zacks Investment Research.