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

Sweta Killa

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

The fund is sponsored by Blackrock. It has amassed assets over $243.97 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 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

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 0.15%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 1.88%.

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 24% of the portfolio. Healthcare and Financials round out the top three.

Looking at individual holdings, Microsoft Corp (MSFT) accounts for about 5.24% of total assets, followed by Apple Inc (AAPL) and Amazon Com Inc (AMZN).

The top 10 holdings account for about 26.93% 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 has added roughly 15.62% so far this year and was up about 1.35% in the last one year (as of 08/28/2019). In the past 52-week period, it has traded between $54.65 and $70.25.

The ETF has a beta of 1 and standard deviation of 12.78% for the trailing three-year period, making it a medium risk choice in the space. With about 200 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 reasonable 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 $178.28 B in assets, SPDR S&P 500 ETF has $256.40 B. IVV has an expense ratio of 0.04% and SPY charges 0.09%.

Bottom-Line

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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iShares Russell Top 200 ETF (IWL): ETF Research Reports
 
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
 
Apple Inc. (AAPL) : Free Stock Analysis Report
 
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iShares Core S&P 500 ETF (IVV): ETF Research Reports
 
SPDR S&P 500 ETF (SPY): ETF Research Reports
 
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