Designed to provide broad exposure to the Large Cap Value segment of the US equity market, the iShares Russell Top 200 Value ETF (IWX) is a passively managed exchange traded fund launched on 09/22/2009.
The fund is sponsored by Blackrock. It has amassed assets over $393.01 M, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies usually 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.
Value stocks have lower than average price-to-earnings and price-to-book ratios. They also have lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.
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 0.20%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.22%.
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 Financials sector--about 25.30% of the portfolio. Healthcare and Energy round out the top three.
Looking at individual holdings, Jpmorgan Chase & Co (JPM) accounts for about 4.13% of total assets, followed by Berkshire Hathaway Inc Class B (BRK.B) and Exxon Mobil Corp (XOM).
The top 10 holdings account for about 31.57% of total assets under management.
Performance and Risk
IWX seeks to match the performance of the Russell Top 200 Value Index before fees and expenses. The Russell Top 200 Value Index is a style factor weighted index that measures the performance of the largest capitalization value sector of the U.S. equity market.
The ETF has added about 3.01% so far this year and was up about 7.71% in the last one year (as of 11/09/2018). In the past 52-week period, it has traded between $49.32 and $55.81.
The ETF has a beta of 0.92 and standard deviation of 12.08% for the trailing three-year period, making it a medium risk choice in the space. With about 139 holdings, it effectively diversifies company-specific risk.
IShares Russell Top 200 Value 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, IWX is a good option for those seeking exposure to the Large Cap ETFs area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 1000 Value ETF (IWD) and the Vanguard Value ETF (VTV) track a similar index. While iShares Russell 1000 Value ETF has $38.01 B in assets, Vanguard Value ETF has $44.18 B. IWD has an expense ratio of 0.20% and VTV charges 0.05%.
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 .
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ISHARS-R T200 V (IWX): ETF Research Reports JPMorgan Chase & Co. (JPM): Free Stock Analysis Report VIPERS-VALUE (VTV): ETF Research Reports ISHARS-RS 1K VL (IWD): ETF Research Reports Berkshire Hathaway Inc. (BRK.B): Free Stock Analysis Report Exxon Mobil Corporation (XOM): Free Stock Analysis Report To read this article on Zacks.com click here.