The iShares S&P/TSX Capped Information Technology Index ETF (TSX:XIT) is a compelling exchange-traded fund (ETF) that may be ideal for Canadian growth investors.
This fund offers a way to bet on the growth of Canadian tech innovators through a single purchase, and it has delivered strong performance with 15% gains thus far in 2025. It has a highly concentrated portfolio focused on the sector's biggest names.
This ETF is not a broadly diversified fund, but it can be useful for investors who want to target the best tech stocks in Canada. It holds a position in 22 companies, with big names such as Shopify, Constellation Software, and Celestica accounting for around 70% of the fund's entire weight. While the "capped" structure is designed to help manage exposure during rebalancing, investors are making a significant bet on the continued success of these few key players.
The fund's strategy is purely focused on capital appreciation. The performance has been compelling for those willing to accept the concentration risk. In the past five years, it has risen by close to 80%. It isn’t, however, a cheap ETF as its management expense ratio is 0.60%, which is higher than typical broad-market index funds, but it reflects the fund's specialized, sector-specific nature.
The iShares S&P/TSX Capped Information Technology Index ETF is a compelling option for growth-focused investors who want specific exposure to the Canadian tech sector. It is best suited for those who are bullish on its top companies and are comfortable with the volatility and high concentration risk that this strategy involves.
