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Should Invesco S&P 500 Top 50 ETF (XLG) Be on Your Investing Radar?
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Designed to provide broad exposure to the Large Cap Blend segment of the US equity market, the Invesco S&P 500 Top 50 ETF (XLG - Free Report) is a passively managed exchange traded fund launched on 05/04/2005.
The fund is sponsored by Invesco. It has amassed assets over $4.03 billion, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Large cap companies 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 usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
Costs
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 0.87%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, 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 41.10% of the portfolio. Telecom and Healthcare round out the top three.
Looking at individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 12.54% of total assets, followed by Apple Inc (AAPL - Free Report) and Nvidia Corp (NVDA - Free Report) .
The top 10 holdings account for about 56.75% of total assets under management.
Performance and Risk
XLG seeks to match the performance of the S&P 500 Top 50 ETF Index before fees and expenses. The S&P 500 Top 50 Index is composed of 50 of the largest companies in the S&P 500 Index.
The ETF has added roughly 9.52% so far this year and it's up approximately 30.60% in the last one year (as of 04/30/2024). In the past 52-week period, it has traded between $31.16 and $42.29.
The ETF has a beta of 1 and standard deviation of 18.82% for the trailing three-year period, making it a medium risk choice in the space. With about 55 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Top 50 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, XLG 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 S&P 500 ETF (IVV - Free Report) and the SPDR S&P 500 ETF (SPY - Free Report) track a similar index. While iShares Core S&P 500 ETF has $441.54 billion in assets, SPDR S&P 500 ETF has $509.67 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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.
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Should Invesco S&P 500 Top 50 ETF (XLG) Be on Your Investing Radar?
Designed to provide broad exposure to the Large Cap Blend segment of the US equity market, the Invesco S&P 500 Top 50 ETF (XLG - Free Report) is a passively managed exchange traded fund launched on 05/04/2005.
The fund is sponsored by Invesco. It has amassed assets over $4.03 billion, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Large cap companies 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 usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
Costs
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 0.87%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, 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 41.10% of the portfolio. Telecom and Healthcare round out the top three.
Looking at individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 12.54% of total assets, followed by Apple Inc (AAPL - Free Report) and Nvidia Corp (NVDA - Free Report) .
The top 10 holdings account for about 56.75% of total assets under management.
Performance and Risk
XLG seeks to match the performance of the S&P 500 Top 50 ETF Index before fees and expenses. The S&P 500 Top 50 Index is composed of 50 of the largest companies in the S&P 500 Index.
The ETF has added roughly 9.52% so far this year and it's up approximately 30.60% in the last one year (as of 04/30/2024). In the past 52-week period, it has traded between $31.16 and $42.29.
The ETF has a beta of 1 and standard deviation of 18.82% for the trailing three-year period, making it a medium risk choice in the space. With about 55 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Top 50 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, XLG 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 S&P 500 ETF (IVV - Free Report) and the SPDR S&P 500 ETF (SPY - Free Report) track a similar index. While iShares Core S&P 500 ETF has $441.54 billion in assets, SPDR S&P 500 ETF has $509.67 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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.