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Large Cap ETF (IVV) Tops $100 billion in AUM

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Large cap ETFs are leading the current market rally driven by a combination of factors such as Trump trade, strongest Q4-earnings growth in two years, solid economic data, stabilizing oil price and growing prospects of rate hike (read: March Rate Hike in the Cards: Bet on These Inverse Treasury ETFs).

Hopes of Trump’s pro-growth policies including big spending, reduced regulations and tax cuts are continuously instilling investors’ confidence in economic growth and inflation. Additionally, the U.S. economy is on solid ground courtesy of an impressive labor market, rising wages, and increasing consumer spending. Americans have an optimistic view of the economy with confidence hitting the highest level in more than 15 years and comfort reaching to the highest point in a decade.

This is especially true, as the Conference Board consumer confidence index jumped to 114.8 in February from a revised 111.6 in January. The Consumer Comfort Index rose to 50.6 in the period ended March from 49.8. Further, solid Q4 corporate earnings, which reached an all-time quarterly record with the highest growth in two years, added to the strength (read: 5 High Beta ETFs & Stocks for a Soaring Market).

Moreover, global fundamentals have improved with resilient recovery in Europe, stabilizing China, and battling deflation in Japan that have receded fears of slowdown.

All these good tidings have encouraged investors to pour their money into equity ETFs. In particular, iShares Core S&P 500 ETF (IVV - Free Report) has accumulated nearly $4 billion in capital so far this year, pushing total AUM of the fund to more than $100 billion. Investors should note that IVV is the second ETF in the space that has managed to garner $100 billion in AUM after the ultra-popular SPDR S&P 500 (SPY - Free Report) hit the similar milestone a decade ago.

Inside Investors’ Love

The jump in IVV’s AUM has been rapid compared to other large cap funds. This is because the ETF assets have moved up from $65 billion a year ago. The major reason for the success is lower fees and the surge in IVV's underlying index –– the S&P 500. Blackrock cut fees for the ETF by 3 bps to 0.04% in October that made IVV one of the low-cost choices in the large cap space (read: Buy These ETFs as BlackRock Cuts Fees).

The S&P 500 index has been on a stellar run since the election, hitting all-time highs on several occasions. As a result, it gained nearly 6% since election and 17% over the one-year period.

IVV in Focus

The fund holds 505 stocks in its basket with none accounting for more than 3.63% of assets. Apple (AAPL - Free Report) , Microsoft (MSFT - Free Report) and Johnson & Johnson (JNJ - Free Report) are the top three elements in the fund’s portfolio. IVV is widely spread across a number of sectors with information technology, financials, health care, and consumer discretionary making up for a double-digit allocation each. It currently has a Zacks ETF Rank of 3 or ‘Hold’ rating with a Medium risk outlook.

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