IndexFunds.com Staff

New Technology iShare

A new iShares exchange-traded fund (ETF) began trading on the American Stock Exchange on Monday. The Goldman Sachs Technology Index Fund (trading symbol: IGM) will track the Goldman Sachs Technology Index, and has an expense ratio of 0.50%.

The index is comprised of over 200 companies in the following industries: producers of computer-related devices, electronics networking and Internet services, producers of computer and Internet software, consultants for information technology and providers of computer services.

Hoping to capitalize on a wave of investor bottom-feeding, Barclays Global Investors (BGI) is launching the new ETF into the teeth of a very bearish tech market. The Dow Jones Technology Index is down over 60% for the year, as of March 21, 2001. The chart below shows the historical performance of the Goldman Sachs Technology Index since inception (8/29/96):

Source: Goldman Sachs

Given their low expense ratios and tax efficiency, ETFs could be a good tool for the contrarian investor to get some exposure to the punch-drunk technology sector. Here's a quick snapshot of what else is out there:

Here's the top ten holdings of tech ETFs and HOLDRs:

                                                        *as of 12/29/00                                                   *as of 9/30/00[/:Author:]