If you're interested in broad exposure to the Large Cap Blend segment of the US equity market, look no further than the iShares Russell Top 200 ETF (IWL), a passively managed exchange traded fund launched on 09/22/2009.
The fund is sponsored by Blackrock. It has amassed assets over $843.97 million, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.15%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.65%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 30.60% of the portfolio. Healthcare and Consumer Discretionary round out the top three.
Looking at individual holdings, Apple Inc (AAPL) accounts for about 7.78% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN).
The top 10 holdings account for about 32.52% of total assets under management.
Performance and Risk
IWL seeks to match the performance of the Russell Top 200 Index before fees and expenses. The Russell Top 200 Index is a float-adjusted, capitalization-weighted index that measures the performance of the largest capitalization sector of the U.S. equity market.
The ETF return is roughly 7.09% so far this year and is up about 14.77% in the last one year (as of 10/30/2020). In the past 52-week period, it has traded between $53.58 and $87.05.
The ETF has a beta of 0.99 and standard deviation of 22.92% for the trailing three-year period, making it a medium risk choice in the space. With about 198 holdings, it effectively diversifies company-specific risk.
IShares Russell Top 200 ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, IWL is a reasonable option for those seeking exposure to the Style Box - Large Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Core SP 500 ETF (IVV) and the SPDR SP 500 ETF (SPY) track a similar index. While iShares Core SP 500 ETF has $211.39 billion in assets, SPDR SP 500 ETF has $286.19 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
iShares Russell Top 200 ETF (IWL): ETF Research Reports
Microsoft Corporation (MSFT) : Free Stock Analysis Report
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Apple Inc. (AAPL) : Free Stock Analysis Report
SPDR SP 500 ETF (SPY): ETF Research Reports
iShares Core SP 500 ETF (IVV): ETF Research Reports
To read this article on Zacks.com click here.
Zacks Investment Research