iShares Tech-Software ETF Down 25% YTD as Investors Rotate to Six Physical-Economy Sectors
iShares Expanded Tech-Software ETF is down nearly 25% year-to-date as AI hardware and language model obsolescence accelerates. Capital has shifted into energy, materials, consumer staples, industrials, real estate and healthcare, with the Invesco S&P 500 Equal Weight ETF outperforming cap-weighted SPY by 5 percentage points YTD.
1. Software ETF Decline
The iShares Expanded Tech-Software ETF has fallen nearly 25% year-to-date, marking the steepest drop among tech-focused benchmarks as investors reassess exposure to companies vulnerable to rapid AI-driven disruption.
2. Accelerating AI Obsolescence
Rapid advancements in AI hardware and large language models have shortened product lifecycles, prompting concerns that established software firms may be displaced before recouping capital investments, triggering selloffs in the sector.
3. Rotation into Physical Economy
Funds have flowed into energy, materials, consumer staples, industrials, real estate and healthcare, while the Invesco S&P 500 Equal Weight ETF has outperformed the cap-weighted SPY by 5 percentage points YTD, reflecting broadening market leadership.