Launched on 09/22/2009, the iShares Russell Top 200 Value ETF (
IWX Quick Quote IWX - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Value segment of the US equity market.
The fund is sponsored by Blackrock. It has amassed assets over $1.20 billion, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies usually have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.20%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.79%.
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 Financials sector--about 23.90% of the portfolio. Healthcare and Telecom round out the top three.
Looking at individual holdings, Berkshire Hathaway Inc Class B (
BRK.B Quick Quote BRK.B - Free Report) accounts for about 3.92% of total assets, followed by Jpmorgan Chase & Co ( JPM Quick Quote JPM - Free Report) and Johnson & Johnson ( JNJ Quick Quote JNJ - Free Report) .
The top 10 holdings account for about 26.06% of total assets under management.
Performance and Risk
IWX seeks to match the performance of the Russell Top 200 Value Index before fees and expenses. The Russell Top 200 Value Index is a style factor weighted index that measures the performance of the largest capitalization value sector of the U.S. equity market.
The ETF has gained about 18.78% so far this year and is up roughly 46.25% in the last one year (as of 05/10/2021). In the past 52-week period, it has traded between $45.94 and $67.78.
The ETF has a beta of 0.96 and standard deviation of 22.55% for the trailing three-year period, making it a medium risk choice in the space. With about 157 holdings, it effectively diversifies company-specific risk.
IShares Russell Top 200 Value 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, IWX is a sufficient option for those seeking exposure to the Style Box - Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 1000 Value ETF (
IWD Quick Quote IWD - Free Report) and the Vanguard Value ETF ( VTV Quick Quote VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $54.67 billion in assets, Vanguard Value ETF has $77.90 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%. 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.