CHAT Outperforms IYW with Double the Return Despite Higher Fees

IYW tracks the iShares U.S. Technology Index, holding 139 stocks with a beta of 1.33 and a dividend yield of 0.10%. CHAT is an actively managed Roundhill fund that targets generative AI companies, holds 52 positions, and carries a beta of 1.75 and a 2.0% dividend yield. Both funds sit in the UK‑listed ETF market and are measured against the S&P 500 as a benchmark for U.S. equity returns.

As of May 11 2026, IYW’s total return over the trailing 12 months was 51.90% while CHAT’s was 122.61%; IYW’s expense ratio is 0.38%, nearly half of CHAT’s 0.75%. Assets under management differ sharply: IYW holds about $24.0 billion, CHAT about $1.6 billion. CHAT’s higher beta indicates greater volatility, and its max drawdown over two years reached 31.3% versus IYW’s 26.5%.

CHAT’s active management lets it overweight AI leaders such as Nvidia, Alphabet and AMD, which drove its strong return but also concentrates risk. IYW’s passive, diversified approach smooths returns, lowers cost and reduces drawdown, appealing to investors who want tech exposure with less swing. The dividend difference—2.0% for CHAT versus 0.1% for IYW—reflects CHAT’s annual payout structure versus IYW’s quarterly distributions.

CHAT allocates roughly 73% to technology and 19% to communication services, mirroring IYW’s 81%/18% split but with a far smaller number of holdings. This concentration means CHAT’s performance hinges on a handful of AI‑heavy stocks, while IYW’s broader basket dilutes any single‑stock shock. The active screen also applies an ESG filter, which excludes certain firms and can tilt the portfolio toward companies with higher sustainability scores.

Monitor whether AI‑related earnings growth can sustain CHAT’s premium, and watch for any fee pressure or scale‑driven cost reductions that might narrow the gap between the two funds.