Launched on 05/15/2000, the iShares Core S&P 500 ETF (IVV) 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 $331.77 billion, making it the largest ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Large cap companies typically 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.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
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 0.03%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.21%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund’s holdings is a valuable exercise. And, 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 29.20% of the portfolio. Healthcare and Consumer Discretionary round out the top three.
Looking at individual holdings, Microsoft Corp (MSFT) accounts for about 6.31% of total assets, followed by Apple Inc (AAPL) and Amazon Com Inc (AMZN).
The top 10 holdings account for about 28.99% of total assets under management.
Performance and Risk
IVV seeks to match the performance of the S&P 500 Index before fees and expenses. The S&P 500 Index measures the performance of the large-capitalization sector of the U.S. equity market.
The ETF has lost about -1.41% so far this year and is up about 25.94% in the last one year (as of 01/13/2022). In the past 52-week period, it has traded between $371.52 and $479.84.
The ETF has a beta of 0.99 and standard deviation of 22.34% for the trailing three-year period, making it a medium risk choice in the space. With about 509 holdings, it effectively diversifies company-specific risk.
IShares Core S&P 500 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, IVV 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 Vanguard S&P 500 ETF (VOO) and the SPDR S&P 500 ETF (SPY) track the same index. While Vanguard S&P 500 ETF has $279.05 billion in assets, SPDR S&P 500 ETF has $450.86 billion. VOO has an expense ratio of 0.03% 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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