A closer look at the Smart US Technology (NZD Hedged) ETF
Gain exposure to some of the world's most influential and innovative companies.

Overview
The Smart US Technology (NZD Hedged) ETF offers Kiwi investors a simple way to gain broad exposure to the US technology (tech) sector. Tracking the S&P 500 Capped 35/20 Information Technology Index, this fund provides exposure to leading US tech companies including Apple, Microsoft, Nvidia, Salesforce and Oracle. The fund is NZD hedged, meaning it is protected against exchange rate fluctuations.
Investing in innovation
Technology is the application of knowledge which makes it easier to produce goods and services, improve their quality or enable the creation of new products and industries. It is a driving force behind progress. Over the past 250 years, technological advancements have underpinned dramatic economic growth and growth in incomes, productivity and living standards. 1
In today’s modern economy, the convergence of traditional science with digitalisation, cloud computing, automation and artificial intelligence (AI), is fueling a new wave of innovation that has the potential to transform economies and societies.2 These technological innovations are shaping the future of industries worldwide.
Unlike broader market-tracking funds that include various sectors, the Smart US Technology (NZD Hedged) ETF is a ‘pure play’ investment focused solely on the technology sector. It provides targeted exposure to some of the world's most influential and innovative companies.
A closer look at the companies and industries in the index
Companies
The companies in the S&P 500 Capped 35/20 Information Technology Index are members of the S&P 500 Index and are categorised as being in the information technology sector. This sector is currently the largest in the S&P 500, representing 30.7% of the index. The next largest sectors are financials at 14.1% and consumer discretionary at 11.4%.3
Each stock’s weighting in the index is based on its market capitalisation.4 The index uses capping to limit the concentration to individual stocks and enhance diversification within the index. The capping is structured as ‘Capped 35/20’ which means the largest stock in the index will have its weighting limited to 35% of the index, and all others will have their weightings limited to 20%. At present, no stocks have their weightings ‘capped’. The index is rebalanced quarterly.
There are currently 69 companies in the index. The median market capitalisation across these companies, or ‘stocks’, is US$45.6 billion. The largest stock (Apple) has a market value of US$3.6 trillion and the smallest is valued at $8.4 billion.5 The 10 largest companies represent 74% of the index. Short profiles on each of these companies is provided below.
The top 10 companies in the S&P 500 Capped 35/20 Information Technology Index
Apple Inc (AAPL) - Index weight 22.5%
California-based Apple produces smartphones, personal computers, tablets and wearables. It also offers payments, digital content, cloud and advertising services. Apple’s products include the ubiquitous iPhone (which accounts for around 50% of the company’s revenue), along with the iPad, Mac, AirPods and Apple Watch. Apple was founded in 1976. Around 55% of revenue is sourced from outside the Americas.Microsoft Corp (MSFT) - Index weight 17.3%
Microsoft was established in 1975. Based in Richmond, near Seattle, it is one the world’s leading software companies. Key products include its windows operating system and applications such as Word and Excel. It has a wide range of other products and services and owns LinkedIn, a business-orientated social network. Revenue is approximately evenly split between the United States and the rest of the world.Nvidia Corp (NVDA) - Index weight 16.2%
Established in 1993 and based in California, Nvidia has pioneered accelerated computing. It calls itself ‘the engine of Artificial Intelligence (AI)’. It produces advanced processors, systems, and software which are the infrastructure for AI. It is also a leader in AI-powered graphics. The US generates around 45% of Nvidia’s revenue, followed by Taiwan with 20% and China/Hong Kong with 15%.Broadcom Inc (AVGO) - Index weight 7.4%
Broadcom produces a broad range of semiconductor6 and infrastructure software solutions. Its products serve networking, broadband, wireless and storage. It has been described as a ‘chipmaker’. It is a major supplier of components to Apple, which accounts for 20% of revenue.7 Based in California, the majority of its revenue is generated in the Asia Pacific region.Salesforce Inc (CRM) - Index weight 2.3%
Founded in 1999 and based in San Francisco, Salesforce is a global leader in cloud-based customer relationship management (CRM) technology. Its software allows companies to consolidate customer data across systems to help them better connect and service customers. It generates most of its revenue in the Americas.Oracle Corp (ORCL) - Index weight 2%
Oracle is an enterprise software company which offers a range of cloud-based applications and platforms as well as hardware and services to help companies improve their processes. The company’s mainstay product has been Oracle Database, one of the most popular corporate database offerings in the world. Based in Texas, about 45% of Oracle’s revenues are sourced from outside the US.Cisco Systems Inc (CSCO) - Index weight 1.7%
Cisco Systems designs and sells a broad range of technologies that power the internet. Its offerings include switches, routers, software-defined networking, controllers, access points, internet of things (IoT), servers and software. Founded in 1984, Cisco Systems is based in San Jose California. Approximately 40% of Cisco’s revenues are sourced from outside the Americas.8Accenture Plc (ACN) - Index weight 1.7%
Originating in the US, Accenture is now based in Dublin, Ireland. It is a leading global professional services company, offering management consulting, strategy, digital and business operations services. Clients include some of the top companies and government organisations in the world. Clients use its services for a range of outcomes including to improve decision-making, mitigate risk, enhance security and implement change management. Accenture generates around 55% of its revenue from outside North America.IBM Corp (IBM) - Index weight 1.7%
New York-based International Business Machines (IBM) was founded in 1911 as a computing-tabulating-recording (C-R-T) company. It introduced the electric accounting machine in 1929. In 1964 it launched the System/360, which became a pivotal mainframe computer for businesses and governments. In 1981, IBM released the IBM PC, revolutionising personal computing. This PC used its DOS operating system and Microsoft software. In the 2000s the company shifted toward cloud computing and AI. Today its hybrid cloud platform and AI technology and services capabilities support clients’ digital transformations and help them engage with customers in new ways. The company generates about 50% of revenue from outside the US.ServiceNow Inc (NOW) - Index weight 1.5%
Founded in 2004, California-based ServiceNow connects workflows across organisations and systems with its Now Platform. This platform helps digitise and streamline organisations. The company has approximately 8,100 enterprise customers that operate in a wide variety of industries. North America accounts for around 65% of total revenue.
Source: Based on company websites and Bloomberg company profile information, which are sourced from Hoover’s Inc. Weightings are as of 4 February 2025 and may change.
Industries
The industry weightings within the S&P 500 Capped 35/20 Information Technology Index are shown below. Firms involved in semiconductors represent the largest proportion of the index at 31.1%. This is followed by technology hardware and storage at 23.8%, and systems software at 22.8%.

Source: iShares data. Information as of 30 January 2025. iShares S&P 500 Information Technology Sector UCITS ETF | IUIT
Risk and return
Over the past 25 years, from December 1999 to December 2024, the US technology sector has outperformed the broader US market. In US dollar terms, the S&P 500 Capped 35/20 Information Technology Index has returned 7.94% per annum while the S&P 500 Index has returned 7.70% per annum.
However, returns from the information technology sector have been more volatile. This is shown in chart below. For clarity, returns over the past 25 years have been put into five-year increments.
The information technology sector has performed strongly compared to the broader market over the past 10 years, although it lagged the market from 2010-2014. Following the unwinding of the 1990s dot-com boom, the information technology sector underperformed. Over the five years from 1999 to 2004 this sector fell 59% while the decline in the broader market was a more modest 11%.

All figures in US dollars. Data sourced from Bloomberg. Indices used: S&P 500 Total Return Index and the S&P 500 Capped 35/20 Information Technology Total Net Return Index.
A way of expressing the volatility of an investment is to use standard deviation. This measures how variable returns are around the average. A higher standard deviation indicates that returns are more volatile. Based on calendar year returns from 2000 to 2024, the standard deviation of annual returns from the S&P 500 Capped 35/20 Information Technology Index has been 30.3% while for the S&P 500 Index the standard deviation of returns has been 18.2%.
Investors should appreciate the higher level of risk involved in investing in the information technology sector. It can be subject to a high level of volatility and faces a range of risks, which may include regulation, competing technologies and changing consumer preferences. Please note, past performance does not guarantee future results.
The role of US technology in a portfolio
An allocation to the US technology sector can complement core investments as part of a ‘core and niche’ approach in a diversified portfolio. As shown above, this sector has demonstrated a higher risk profile than the broader market, which may lead investors to limit their exposure to this sector, depending on their risk tolerance and portfolio composition.
How NZD hedging may impact the fund’s returns
The Smart US Technology (NZD Hedged) ETF is hedged to the NZ dollar. Currency hedging helps reduce the impact of currency fluctuations on the value of international investments. It aims to offset any losses and gains in the NZ dollar value caused by changes in exchange rates. By doing so, it means returns received by NZ investors will generally reflect the performance of the underlying market in its local currency.
It is important to note that while currency hedging can protect against negative returns caused by a rise in the NZ dollar, it also means the fund will miss out on potential gains from a fall in the NZ dollar. In contrast, returns from an unhedged fund can be boosted by a fall in the NZ dollar, but also reduced by a gain in the NZ dollar.
Consider the risks
US tech stocks can be volatile. Investment return and principal value of an investment will fluctuate so that an investor's shares, when sold or redeemed, may be worth more or less than the original cost.
For investors looking to add US tech assets to their portfolio, we recommend consulting a financial advice provider to ensure it aligns with personal investment goals and risk tolerance. The Product Disclosure documents for the Global Series Exchange Traded Funds are available here.
Footnotes:
New Zealand Productivity Commission (2019) New Zealand, technology and productivity. Technological change and the future of work, Draft report.
Technology and Innovation – Investing for Global Growth. Blackrock. Technology and Innovation - Investing for Growth | BlackRock
S&P 500 factsheet, 31 January 2025. S&P 500® | S&P Dow Jones Indices
Market capitalisation is the value of a company that is traded on the share market. It is calculated, in general terms, by multiplying the number of shares on issue by the share price. S&P 500® | S&P Dow Jones Indices
S&P 500 Capped 35/20 IT Sector Index Factsheet, 31 January 2025. S&P 500 Capped 35/20 Information Technology Sector Index | S&P Dow Jones Indices
A semiconductor can conduct electricity in some situations but block it in others. Any electronics have a chip – or several chips – inside which are made of semiconductors. Silicon is the basis for semiconductors and computer chips. Semiconductors are essential to the functioning of the modern economy and society. Source: Stanford explainer: Semiconductors | Stanford Report
Apple inks multi-billion-dollar deal with Broadcom for U.S.-made chips | Reuters

iShares® and BlackRock® are registered trademarks of BlackRock, Inc. and its affiliates (“BlackRock”) and are used under license. BlackRock makes no representations or warranties regarding the advisability of investing in any product or the use of any service offered by Smartshares Limited.
Past performance is not a reliable guide to future performance. The calculations and returns used in this article are illustrative and intended as a guide only, and are not an indicator of future returns. The value of investments can go down as well as up and investors may not get back the full amount invested nor any particular rate of return referred to in this article. Returns are not guaranteed. This information is intended to provide a general guide and is based upon, and derived from sources Smart considers reliable. Neither Smart nor NZX Limited, or their respective directors and employees accept any liability for any errors, omissions, negligent misstatements, or for the results of any actions taken, or not taken in reliance on this information. This information is not a substitute for professional advice. In preparing this information Smart did not take into account the investment objectives, financial situation or particular needs of any particular person. Accordingly, before making any investment decision, Smart recommends professional assistance from a licensed Financial Advice Provider is sought.
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