Launched on 09/22/2009, the iShares Russell Top 200 ETF (IWL) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Blend segment of the US equity market.
The fund is sponsored by Blackrock. It has amassed assets over $204 M, making it one of the average sized ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Large cap companies usually have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
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 cheaper products in the space.
It has a 12-month trailing dividend yield of 1.79%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, 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 20.90% of the portfolio. Healthcare and Financials round out the top three.
Looking at individual holdings, Microsoft Corp (MSFT) accounts for about 4.50% of total assets, followed by Apple Inc (AAPL) and Amazon Com Inc (AMZN).
The top 10 holdings account for about 25.7% 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 7.50% so far this year and is down about -1.82% in the last one year (as of 02/04/2019). In the past 52-week period, it has traded between $54.65 and $68.21.
The ETF has a beta of 0.99 and standard deviation of 12.66% 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.
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 sufficient 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) and the SPDR S&P 500 ETF (SPY) track a similar index. While iShares Core S&P 500 ETF has $154.26 B in assets, SPDR S&P 500 ETF has $251.87 B. IVV has an expense ratio of 0.04% and SPY charges 0.09%.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also 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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