Should iShares Russell Top 200 ETF (IWL) Be on Your Investing Radar?
Designed to provide broad exposure to the Large Cap Blend segment of the US equity 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 over $724.28 million, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Companies that find themselves in the large cap category typically 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.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.15%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.71%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 29.30% of the portfolio. Healthcare and Telecom round out the top three.
Looking at individual holdings, Microsoft Corp (MSFT) accounts for about 7.09% of total assets, followed by Apple Inc (AAPL) and Amazon Com Inc (AMZN).
The top 10 holdings account for about 32.33% 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 capitalization sector of the U.S. equity market.
The ETF return is roughly 4.94% so far this year and is up about 15.12% in the last one year (as of 08/03/2020). In the past 52-week period, it has traded between $53.58 and $79.63.
The ETF has a beta of 0.98 and standard deviation of 22.24% for the trailing three-year period, making it a medium risk choice in the space. With about 198 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Russell Top 200 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, IWL is a good 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 SP 500 ETF (IVV) and the SPDR SP 500 ETF (SPY) track a similar index. While iShares Core SP 500 ETF has $206.21 billion in assets, SPDR SP 500 ETF has $291 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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.
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iShares Russell Top 200 ETF (IWL): ETF Research Reports
Microsoft Corporation (MSFT) : Free Stock Analysis Report
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Apple Inc. (AAPL) : Free Stock Analysis Report
SPDR SP 500 ETF (SPY): ETF Research Reports
iShares Core SP 500 ETF (IVV): ETF Research Reports
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