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Should iShares Russell Top 200 Value ETF (IWX) Be on Your Investing Radar?

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If you're interested in broad exposure to the Large Cap Value segment of the US equity market, look no further than the iShares Russell Top 200 Value ETF (IWX - Free Report) , a passively managed exchange traded fund launched on 09/22/2009.

The fund is sponsored by Blackrock. It has amassed assets over $303.08 M, 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. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.

Value stocks have lower than average price-to-earnings and price-to-book ratios. They also have lower than average sales and earnings growth rates. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.

Costs

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.

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 2.24%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. 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 23.10% of the portfolio. Healthcare and Energy round out the top three.

Looking at individual holdings, Jpmorgan Chase & Co (JPM - Free Report) accounts for about 4.12% of total assets, followed by Exxon Mobil Corp (XOM - Free Report) and Berkshire Hathaway Inc Class B (BRKB).

The top 10 holdings account for about 31.26% 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 lost about -0.86% so far this year and was up about 7.89% in the last one year (as of 07/16/2018). In the past 52-week period, it has traded between $48.18 and $55.81.

The ETF has a beta of 0.98 and standard deviation of 13.18% for the trailing three-year period, making it a medium risk choice in the space. With about 137 holdings, it effectively diversifies company-specific risk.

Alternatives

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 reasonable option for those seeking exposure to the Large Cap ETFs area of the market. Investors might also want to consider some other ETF options in the space.

The iShares Russell 1000 Value ETF (IWD - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $36.51 B in assets, Vanguard Value ETF has $39.70 B. IWD has an expense ratio of 0.20% and VTV charges 0.05%.

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.