ETFs
Should the iShares Russell Top 200 ETF (IWL) be on your investing radar?
Designed to provide broad exposure to the Large Cap Blend segment of the U.S. stock market, the iShares Russell Top 200 ETF (IWL) is a passively managed exchange-traded fund launched on 09/22/2009.
The fund is sponsored by Blackrock. It has amassed assets of over $1.37 billion, making it one of the largest ETFs attempting to match the Large Cap Blend segment of the US stock market.
Why a large cap mix
Companies in the large-cap category tend to have a market capitalization above $10 billion. Overall, this is generally a stable option, with less risk and safer cash flow than mid- and small-cap companies.
Typically holding a mix of growth and value stocks, blended ETFs also demonstrate the qualities of both value and growth investments.
Costs
Investors should also pay attention to an ETF’s expense ratio. Lower cost products will produce better results than higher cost products, assuming all other parameters remain the same.
The annual operating expenses of this ETF are 0.15%, making it one of the cheapest products in the industry.
It has a 12-month current dividend yield of 1.16%.
Sector exposure and main holdings
Although ETFs provide diversified exposure that minimizes the risk associated with any individual stock, it is still important to review a fund’s holdings before investing. Fortunately, most ETFs are very transparent products that disclose their holdings daily.
This ETF has the highest allocation to the information technology sector – approximately 33.10% of the portfolio. The finance and health sectors complete the top three.
Looking at individual stocks, Microsoft Corp (MSFT) accounts for around 8.63% of total assets, followed by Apple Inc (AAPL) and Nvidia Corp (NVDA).
The top 10 holdings represent approximately 38.9% 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-cap sector of the U.S. stock market.
The ETF is up approximately 10.54% so far this year and it is up approximately 30.37% over the past year (as of 5/14/2024). Over the past 52 weeks, it has traded between $98.32 and $127.12.
The ETF has a beta of 0.99 and a standard deviation of 17.42% for the trailing three-year period, making it a medium-risk pick in the space. With around 200 securities, it effectively diversifies company-specific risks.
Alternatives
The iShares Russell Top 200 ETF has a Zacks ETF Rank of 3 (Hold), which is based on the asset class’s expected return, expense ratio, and momentum, among other factors. Thus, IWL is a sufficient option for those looking for exposure to the Style Box – Large Cap Blend sector of the market. Investors might also want to consider other ETF options in the space.
The story continues
The iShares Core S&P 500 ETF (IVV) and the SPDR S&P 500 ETF (SPY) track a similar index. While the iShares Core S&P 500 ETF has $453.91 billion in assets, the SPDR S&P 500 ETF has $514.83 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Final result
Passively managed ETFs are increasingly popular with institutional and retail investors due to their low cost, transparency, flexibility and tax efficiency. These are great vehicles for long-term investors.
To learn more about this and other ETFs, research products that match your investment objectives, and read articles on the latest developments in the ETF investment universe, please visit the Zacks ETF Center.
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iShares Russell Top 200 ETF (IWL): ETF Research Reports
Apple Inc. (AAPL): Free Stock Analysis Report
Microsoft Corporation (MSFT): Free Stock Analysis Report
NVIDIA Corporation (NVDA): Free Stock Analysis Report
SPDR S&P 500 ETF (SPY): ETF Research Reports
iShares Core S&P 500 ETF (IVV): ETF Research Reports