Comparison of Technology ETFs: IYW vs. CHAT
When exploring options in the tech investment space, investors face the choice between the iShares US Technology ETF (IYW) and the Roundhill Investments – Generative AI & Technology ETF (CHAT). It’s crucial to consider how these two differ—one being more broad and diversified, while the other zeroes in on high-growth themes related to generative AI.
Both funds focus on innovators in software and hardware, but they’re managed differently and perform uniquely in today’s fast-changing AI landscape. IYW embraces a more traditional approach, while CHAT is more specialized.
Cost and Size Overview
| Metric | IYW | CHAT |
|---|---|---|
| Publisher | iShares | Roundhill Investment |
| Expense Ratio | 0.38% | 0.75% |
| 1-Year Return (as of May 11, 2026) | 51.90% | 122.61% |
| Dividend Yield | 0.10% | 2.00% |
| Beta | 1.33 | 1.75 |
| Assets Under Management | $24 billion | $1.6 billion |
Beta reflects how much the value fluctuates compared to the S&P 500 and is based on five years of data. One-year returns show total returns over the following year. Dividend yield is the distribution yield over the past 12 months.
CHAT’s expense ratio is notably higher at 0.75%, nearly double that of IYW’s 0.38%. But on the bright side, CHAT boasts a much higher dividend yield of 2%, while IYW offers just 0.10%.
Evaluating Performance and Risk
| Metric | IYW | CHAT |
|---|---|---|
| Maximum Drawdown (2 Years) | (26.50%) | (31.30%) |
| $1,000 Growth in 2 Years (Total Return) | $1,798 | $2,591 |
Investment Focus
CHAT centers around generative AI, allocating 73% to technology and 19% to communications services. Launched in 2023, it actively manages 52 positions, with major holdings like Nvidia (6.79%), Alphabet (6.76%), and Advanced Micro Devices (5.79%). Its year-end dividend stands at $1.68 per share, and it incorporates ESG considerations in its investment strategy.
Meanwhile, IYW tracks a wider index of 139 US tech stocks and has been around since 2000. This ETF includes 16.21% in Nvidia, Apple (13.36%), and 7.19% in Alphabet, giving it a broader sector exposure of 81% technology and 18% communications services. IYW’s dividend over the last year was $0.27 per share, with no specific thematic filters like ESG screens.
Implications for Investors
Both CHAT and IYW provide pathways into the dynamic arena of AI technology, but their strategies diverge significantly. CHAT is specifically tailored to companies directly engaged in generative AI—think ChatGPT. This focus has led to impressive returns and higher dividend payouts. However, it also implies a narrower scope and higher volatility, evident in its elevated beta values and larger drawdowns, plus it offers dividends just once a year compared to IYW’s quarterly schedule.
IYW, on the other hand, offers more diversification, evident in its larger number of holdings. While it also includes AI stocks like Nvidia, it reaches beyond that, incorporating firms that may not be known for their AI capabilities, which can cushion against downturns in the sector.
With a lower expense ratio, IYW provides a more cost-effective option for investors while generally presenting less volatility. This makes it a fitting choice for those looking to engage in the tech sector, especially with a more cautious approach to risk.
