Looking for broad exposure to the Large Cap Blend segment of the US equity market? You should consider the iShares Russell Top 200 ETF (
IWL Quick Quote IWL - Free Report) , a passively managed exchange traded fund launched on 09/22/2009.
The fund is sponsored by Blackrock. It has amassed assets over $807.42 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. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
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 1.63%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 26.30% of the portfolio. Healthcare and Telecom round out the top three.
Looking at individual holdings, Apple Inc (
AAPL Quick Quote AAPL - Free Report) accounts for about 8.52% of total assets, followed by Microsoft Corp ( MSFT Quick Quote MSFT - Free Report) and Amazon Com Inc ( AMZN Quick Quote AMZN - Free Report) .
The top 10 holdings account for about 33.89% 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 has added about 10.38% so far this year and is up roughly 19.71% in the last one year (as of 09/16/2020). 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 22.58% for the trailing three-year period, making it a medium risk choice in the space. With about 197 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 sufficient 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 Quick Quote IVV - Free Report) and the SPDR SP 500 ETF ( SPY Quick Quote SPY - Free Report) track a similar index. While iShares Core SP 500 ETF has $213.70 billion in assets, SPDR SP 500 ETF has $301.02 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%. Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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.