Should iShares Core S&P 500 ETF (IVV) Be on Your Investing Radar?

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 $431.60 billion, making it the largest ETFs attempting to match the Large Cap Blend segment of the US equity market.

Why Large Cap Blend

Companies that fall in the large cap category tend to 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 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 0.03%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 1.38%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, 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 29.60% of the portfolio. Financials and Healthcare round out the top three.

Looking at individual holdings, Apple Inc (AAPL) accounts for about 7.30% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN).

The top 10 holdings account for about 31.05% 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 added about 4.51% so far this year and is up roughly 23.69% in the last one year (as of 02/21/2024). In the past 52-week period, it has traded between $387.07 and $504.35.

The ETF has a beta of 1 and standard deviation of 17.42% for the trailing three-year period, making it a medium risk choice in the space. With about 507 holdings, it effectively diversifies company-specific risk.

Alternatives

IShares Core S&P 500 ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IVV 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 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 $400.25 billion in assets, SPDR S&P 500 ETF has $486.72 billion. VOO has an expense ratio of 0.03% and SPY charges 0.09%.

Bottom-Line

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they 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 Core S&P 500 ETF (IVV): 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

Vanguard S&P 500 ETF (VOO): ETF Research Reports

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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