Prediction: Buying the iShares US Technology ETF (IYW) Today Could Set You Up for Life

Key Points

• With enough patience and discipline, an investor can accumulate large savings.
• To get wealthier faster, consider this ETF, which has a very strong track record.
• It's a promising investment, especially if you're bullish on technology stocks.
• 10 stocks we like better than iShares Trust - iShares U.s. Technology ETF ›

You might have clicked into this article skeptically, thinking it's unlikely that any particular investment could set you up for life. But it's true -- lots of investments can set you up for life, as long as you follow a few rules. These include:

1. Stick with the plan and keep adding money over time.
2. Plan to do so for many, many years.
3. Keep up with your investments, making sure they remain promising.

Here's a look at a particularly promising investment -- the iShares US Technology ETF (NYSEMKT: IYW). It's an exchange-traded fund (ETF) -- a fund that trades like a stock.

Image source: Getty Images. ## Why the iShares US Technology ETF?

A key reason why this ETF may set you up for life is that it's been a very strong performer over many years. Check it out in the table below, where I'll also include stats for a standard S&P 500 index fund:

| ETF | 5-Year Average. Annual Return | 10-Year Average Annual Return | 15-Year Average Annual Return | | --- | --- | --- | --- | | iShares US Technology ETF | 21.31% | 21.43% | 19.65% | | SPDR S&P 500 ETF | 15.97% | 13.38% | 14.62% |

Source: Morningstar.com, as of July 17, 2025.

Those are pretty tantalizing numbers, especially when you remember that both the S&P 500 and the overall stock market have averaged annual returns of close to 10% over many decades. Clearly, these are not the kinds of returns you can always expect to get. But it is fair to assume that you have a good chance of outperforming the S&P 500's returns with the iShares US Technology ETF.

Let's not assume that your money will average around 20% gains annually (though, of course, it might). The table below uses a top growth rate of 12% and shows how your money might grow over time at different rates -- if you sock away $12,000 annually.

| Investing $12,000 Annually for | Growing at 8% Annually | Growing at 10% Annually | Growing at 12% Annually | | --- | --- | --- | --- | | 5 years | $76,032 | $80,587 | $85,382 | | 10 years | $187,746 | $210,374 | $235,855 | | 15 years | $351,892 | $419,397 | $501,039 | | 20 years | $593,076 | $756,030 | $968,385 | | 25 years | $947,452 | $1,298,181 | $1,792,007 | | 30 years | $1,468,150 | $2,171,321 | $3,243,511 | | 35 years | $2,233,226 | $3,577,522 | $5,801,557 | | 40 years | $3,357,372 | $5,842,222 | $10,309,707 |

Source: Calculations by author.

Story ContinuesMany of those numbers could set you up for life -- depending, of course, on your lifestyle and spending habits, along with where you live and what other retirement income streams you have. (Such income streams might include Social Security benefits, annuity income, retirement accounts like IRAs and 401(k)s, and payments from dividend stocks.)

Meet the iShares US Technology ETF

Here's a closer look at just what you'll get with the iShares US Technology ETF. I'll start with its expense ratio (annual fee) of 0.39%, meaning that you'll be charged $3.90 annually for each $1,000 you have invested in the fund. There are much lower fees to be found, but this is reasonable, especially if the ETF continues to post excellent returns.

The iShares US Technology ETF tracks the Russell 1000 Technology RIC 22.5/45 Capped Index, which is focused on technology stocks. The ETF recently held around 146 different stocks, with its top three holdings making up nearly half its total value. Here are the top 10:

| Stock | Weight in ETF | | --- | --- | | Nvidia | 17.05% | | Microsoft | 15.95% | | Apple | 13.12% | | Broadcom | 3.86% | | Meta Platforms | 3.83% | | Oracle | 2.88% | | Alphabet Class A | 2.42% | | Palantir Technologies | 2.39% | | Alphabet Class C | 1.99% | | IBM | 1.86% |

Source: iShares.com, as of July 17, 2025.

This ETF will have you quickly and easily invested in more than 140 tech stocks, which can be wonderful if that's what you want to be invested in. But do keep in mind that nearly half of your dollars will be in Nvidia, Microsoft, and Apple. That can be wonderful, too, if you're bullish on the future of those businesses.

Do remember, though, that when the market pulls back, as it occasionally does, growth stocks, in general, and this ETF, in particular, will tend to fall harder. However, given enough time, they'll likely recover and go on to new highs. Give this powerful ETF some serious consideration for a berth in your long-term portfolio.

Should you invest $1,000 in iShares Trust - iShares U.s. Technology ETF right now?

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Selena Maranjian has positions in Alphabet, Apple, Broadcom, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Apple, International Business Machines, Meta Platforms, Microsoft, Nvidia, Oracle, and Palantir Technologies. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Prediction: Buying the iShares US Technology ETF (IYW) Today Could Set You Up for Life was originally published by The Motley Fool

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