OEF Ditches Blue Chips for AI Stocks, but Is It Worth the Higher Fee?

The iShares S&P 100 ETF has undergone significant changes in its holdings. Four technology companies tied to AI capital spending have been added, while a sneaker brand, a toothpaste maker, a mall REIT, and an aerospace industrial company have been removed.

The additions include Dell Technologies, Palo Alto Networks, Arista Networks, and SanDisk, which are all focused on AI infrastructure. These companies have seen significant growth in their market values this year, with SanDisk up 633% year-to-date and Dell up 320.24%. The removals include Nike, Colgate-Palmolive, Simon Property Group, and Honeywell.

The iShares S&P 100 ETF has been shifting its focus towards technology companies for some time now. As of June 30, NVIDIA was the largest holding in the fund, followed by Apple, Microsoft, Amazon, and Broadcom. The AI capital-spending trade has been reshaping the top holdings in the fund over the past few quarters.

The performance of OEF has been similar to that of other funds in the market. Over one year, it returned 19.56%, while QQQ returned 24.99% and VOO returned 20.08%. However, OEF's expense ratio is significantly higher than those of QQQ and VOO.