The small cap stocks have been struggling in 2014 as investors
have been taking profits in the high-flying biotech and niche
On the opposite end of the spectrum the mega cap stocks have
not registered blockbuster gains, but they are holding up better
than their smaller counterparts.
A stock is considered to be a mega cap when its market
capitalization is above $100 billion. The companies that fall
into this category include household names such as Apple (NASDAQ:
), Microsoft (NASDAQ:
) and Exxon Mobil (NYSE:
). They tend to come from a variety of sectors with a larger
concentration on technology and the financials.
There are three big ETF plays in the sector and while they are
all similar, they have enough differences to break them down and
look under the hood.
The iShares S&P 100 Index ETF (NYSE:
) is a basket of 100 of the largest stocks based in the U.S. The
ETF is the largest of the three with over $4 billion in assets
Old School Dividend ETFs Leading The Way
In 2014 the ETF has a small gain of 0.6 percent and it
currently pays a 1.9 percent dividend yield. The top holdings
include AAPL, XOM, MSFT, and Johnson & Johnson (NYSE:
). The expense ratio is 0.20 percent.
The Vanguard Mega Cap 300 Index ETF (NYSE:
) is composed of 300 mega cap stocks and currently has $978
million in assets under management. The ETF has the best
performance of the three this year with a gain of 1.2 percent and
also the lowest expense ratio at 0.11 percent.
The ETF is more diversified because of its exposure to 300
stocks, however the top holdings remain similar with Apple, Exxon
Mobil, Google (NASDAQ:
), Microsoft and Johnson & Johnson in the top four. The
dividend yield is 2.0 percent.
A more concentrated version of the first two ETFs is the
Guggenheim Russell Top 50 Mega Cap ETF (NYSE:
). As the name states, there are only 50 stocks in the ETF
portfolio that amounts to $489 million.
The ETF has underperformed its peers in 2014 with a small loss
of 0.1 percent. The top holdings are Apple, Exxon Mobile,
Microsoft and Johnson & Johnson. The dividend yield is
slightly higher at 2.3 percent and the expense ratio is the same
as OEF at 0.20 percent.
When it comes down to choosing the best of the group the
decision will be difficult as all three have similar portfolios,
expenses, dividend yields, and performance. This call will come
down to personal preference at to which factor is the most
© 2014 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
Free Trading Education -
Check out the free events taking place on Marketfy
this week. Spaces are limited. Sign up today.