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Launched on 05/15/2000, the iShares Russell 1000 ETF (IWB) 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 $31.58 billion, making it one of the largest 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 usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining 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 1.10%.
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 28.80% of the portfolio. Healthcare and Consumer Discretionary round out the top three.
Looking at individual holdings, Microsoft Corp (MSFT) accounts for about 5.63% of total assets, followed by Apple Inc (AAPL) and Amazon Com Inc (AMZN).
The top 10 holdings account for about 25.69% of total assets under management.
Performance and Risk
IWB seeks to match the performance of the Russell 1000 Index before fees and expenses. The Russell 1000 Index measures the performance of the large-capitalization sector of the U.S. equity market. The Index is a float-adjusted capitalization-weighted index of equity securities issued by the approximately 1,000 largest issuers in the Russell 3000 Index.
The ETF has gained about 26.87% so far this year and is up about 32.68% in the last one year (as of 11/16/2021). In the past 52-week period, it has traded between $200.01 and $263.91.
The ETF has a beta of 1.02 and standard deviation of 22.82% for the trailing three-year period, making it a medium risk choice in the space. With about 1030 holdings, it effectively diversifies company-specific risk.
IShares Russell 1000 ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IWB is an excellent option for investors seeking exposure to the Style Box – Large Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
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 $324.67 billion in assets, SPDR S&P 500 ETF has $428.15 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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 1000 ETF (IWB): ETF Research Reports
Amazon.com, Inc. (AMZN): Free Stock Analysis Report
Apple Inc. (AAPL): Free Stock Analysis Report
Microsoft Corporation (MSFT): Free Stock Analysis Report
SPDR S&P 500 ETF (SPY): ETF Research Reports
iShares Core S&P 500 ETF (IVV): ETF Research Reports
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Zacks Investment Research