Vibe coding, whereby a complete novice coder like me can use AI to code up some software, is apparently killing Software as a Service (SaaS). Now to be sure, my Claude coding can do amazing things that would normally be well beyond my ability. But are I and others going to vibe code our way to replacing Salesforce?
The answer is no. Sure I could maybe do a fair enough CRM piece of software. But the point of Salesforce is not just the software, it is the 150,000 corporate customers with millions of users. It is embedded. Those users know how to use it and theirs an entire allied industry of support and customisation.
My simple CRM simply does not have that much scale, support and frankly will struggle to get any adoption.
Further I would add that if vibe coding works for me, imagine how much money it could save a company like Salesforce who employ thousands of real world coders?
But the SaaS sell-off has been in full force and that brings my attention to iShares Expanded Tech-Software Sector ETF (Code IGV). It is down almost 20% year-to-date and is trading at its lowest price-to-book and forward PE in a decade. Its ten-year annualised return is around 16%.
It is the purest software-only ETF available with 117 software companies in one trade. Names like Microsoft, Oracle, Palantir, and Salesforce at the top. It’s a high-conviction sector bet that has delivered strong long-run returns, at the cost of serious volatility and zero diversification outside software.
I would argue that it is fairly defensive as well as these big names aren’t going anywhere as they’re entrenched in their markets.
Top 10 details
| Company | Weight |
|---|---|
| Oracle (ORCL) | ~9.5% |
| Microsoft (MSFT) | ~9.0% |
| Palantir (PLTR) | ~8.2% |
| Salesforce (CRM) | ~6.8% |
| Palo Alto Networks (PANW) | ~5.4% |
| AppLovin (APP) | ~4.8% |
| Adobe (ADBE) | ~4.6% |
| Intuit (INTU) | ~4.4% |
| CrowdStrike (CRWD) | ~3.9% |
| ServiceNow (NOW) | ~3.7% |
The top ten makes up almost 60% of the ETF, so some serious concentration.
And to be clear, this is a software-only ETF. There are other tech ETFs that have done better such as the Vanguard Information Technology ETF (code VGT) that has done around 22% annualised over the last decade. That includes the likes of Nvidia and other hardware but I like this ETF for the recent sell off and pure software focus.
iShares Trust – iShares Expanded Tech-Software Sector (IGV)
| ETF name | iShares Expanded Tech-Software Sector ETF |
| NYSE code | IGV |
| ETF issuer | Blackrock (iShares) |
| Issue date | 2001 |
| Total investment cost | 0.39% |
| ETF Benchmark | S&P North American Expanded Technology Software Index |
| Tax-free savings account | NO |
| Market cap | ±$12.3billion |
| Dividend yield | Minimal — this is a growth fund |
ETF blog
At Just One Lap, we are big fans of passive investment using ETFs. In this weekly blog, we discuss ETFs on the local market and the factors you need to consider when choosing an ETF. If you have wondered how one ETF differs from another, this is where you can find out. We explain which index each ETF tracks, what type of portfolio could benefit from holding each ETF, and how the costs will affect your bottom line.
