BlackRock Debuts Three ETFs Targeting Mega-Cap Stocks
The new iShares ETFs allow investors to customize their exposure to the largest U.S. companies.
BlackRock Inc., the world's biggest exchange-traded fund issuer, launched a trio of ETFs offering investors exposure to mega-caps, the portion of the U.S. stock market that includes fast-growing giants like $3.42 trillion Nvidia Corp.
The iShares Top 20 U.S. Stocks ETF (TOPT), iShares Nasdaq Top 30 Stocks ETF (QTOP), and iShares Nasdaq-100 ex-Top 30 ETF (QNXT) began trading today, according to a press release. The trio permit investors to choose whether to focus on the largest U.S. companies or the next tier of large firms, the announcement said.
The funds all dipped less than 1% in their first day of trading.
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U.S. mega-cap stocks like the so-called Magnificent 7, which includes Nvidia, Apple Corp. and Tesla Inc., have led broader market performance over the past year. For example, TOPT tracks the S&P 500 Top 20 Select Index, the 20 largest U.S. companies in the S&P 500 by market value, which has surged 43% over the past year. That's ahead of the 39% gain in the SPDR S&P 500 ETF Trust (SPY).
"Investors expecting mega-cap momentum to continue may be attracted to an ETF focused on this market segment," etf.com Research Lead Kent Thune said.
According to FactSet data cited in the release, the top 20 largest companies in the S&P 500 Index have contributed more than two-thirds of the index’s return over the past three years.
The launches follow BlackRock’s recent announcement of AI-focused fund launches.
Mega-Cap Focus
QTOP follows the 30 largest domestic and international non-financial companies listed on the Nasdaq, while QNXT compliments these offerings by targeting the next tier of growth companies—approximately 70 securities ranked 31st through 100th in the Nasdaq-100 Index, their prospectuses stated.
These ETFs “can be used by investors looking for more targeted exposure to mega caps or those looking to broaden their exposure to large, well-known companies,” Rachel Aguirre, U.S. head of iShares products at BlackRock, said in the announcement.
The new funds join BlackRock’s existing U.S. large-cap offerings, including the $914 million iShares MSCI U.S.A. Equal Weighted ETF (EUSA) and the $14.2 billion iShares S&P 100 ETF (OEF), according to the release.
Each fund will charge an expense ratio of 0.2%, their prospectuses noted.
