Sector Boost With QDVE For ETF Investors

D. Petkovski | January 26, 2025 | Stocks & ETFs

As an buy-and-forget investor, you’re probably tracking a diversified index such as the S&P 500 or MSCI World.

This is a great strategy which historically outperformed 90%+ of actively managed funds.

Still, based on your knowledge, expectations, and risk tolerance, you might give a personal twist to an index investing portfolio.

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What is a Sector Boost?

Sector boost is a term I use to describe a strategic allocation in a sector you expect to do better than the respective index.

And I’ve talked with people that have different sectors of interest, but for me, the tech sector has been a clear winner in the past few years.

And I materialize this preference using $QDVE.

QDVE Explained

Ticker symbols: QDVE, IUIT, IITU; ISIN: IE00B3WJKG14

QDVE (iShares S&P 500 Information Technology Sector UCITS ETF USD (Acc)) is an ETF tracking the S&P 500 Capped 35/20 Information Technology index.

Basically, it’s an index tracking the tech constituents from the S&P 500 and is market cap weighted.

As you’d probably figured so far, it has a much higher concentration of companies (~70, with ~23% allocation in the top one).

QDVE has a TER of 0.15% and it’s an accumulating fund (it reinvests the dividends instead of distributing them to investors).

S&P 500 vs. Tech Sector Performance

Here’s the recent performance of $CSPX (left) vs. $QDVE (right):

As you can see from the image, $QDVE continuously outperforms the $CSPX (tracking its parent index).

Of course, volatility comes both ways (see 2022), but as a long-term bull, that’s the price you pay for more upside.

And it’s been a great boost to my US allocation so far.

Index Investing vs. Sector Boost

It’s worth noting that I’m not recommending substituting an S&P 500 tracker with $QDVE!

Actually, I often say that a US ETF is the most adequate one-fund portfolio for most people – see Core Portfolio for EU Investors, CSPX vs SPYL, or Replicating VWCE.

The sector boost is, unsurprisingly, a boost.

You might have 85-95% in your “main” ETF tracking a broadly diversified index and allocate the remaining 5-15% in a sector boost.

At least this is what I do.

Why Not a Nasdaq 100 ETF?

This is a good question and I’ve considered it as a sector booster.

There are good ETFs that track the Nasdaq 100 index, which tracks the top 100 non-financial companies trading on the Nasdaq stock exchange.

Here are a couple of reason why I decided to with $QDVE rather than a Nasdaq 100 tracker (like $CNDX).

First of all, the expense ratio – $CNDX costs 0.33% p/a, while $QDVE is less than half of that (0.15%).

$CNDX is more diversified and includes a few non-tech companies, while $QDVE is pure tech (note that Nasdaq 100 only excludes financial companies, but not Costco, AirBnb, etc. Link to full composition).

So basically, I could pay less and bet on my expectations that the tech sector, without any dilution, will outperform anything else.

And so far, I was right.

Although, I would’ve done great even with a $NDX tracker.

Note: tracking the Nasdaq 100 is the go-to approach for many looking for tech allocation. So it’s not wrong to consider it. I just liked $QDVE more.

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D. Petkovski

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