BlackRock (BLK), the world’s largest asset management firm, has launched three new ETFs aimed at helping investors diversify their exposure to large U.S. stocks. Two of these ETFs provide exposure to top large-cap companies, while the third is designed to avoid them. This move comes as investors are concerned about the heavy weighting of large tech stocks and their significant role in the U.S. market’s lengthy bull run.
According to BlackRock, the top 20 large-cap companies in the S&P 500 index have contributed 68% of the index’s total return over the past three years. However, as inflation eases and the Federal Reserve announces expected rate cuts, market breadth has improved, allowing investors to explore other market areas beyond large-cap stocks.
Rachel Aguirre, head of U.S. iShares Products at BlackRock, mentioned that these ETFs allow investors to target investments in mega-cap stocks or diversify away from large companies.
The three new ETFs are:
iShares Top 20 U.S. Stocks ETF (TOPT)
Objective: Invests in the 20 largest companies by market cap within the S&P 500.
Top Holdings: Apple (AAPL, Financial), Nvidia (NVDA), Microsoft (MSFT).
Expense Ratio: 0.20%
iShares Nasdaq Top 30 Stocks ETF (QTOP)
Objective: Targets the 30 largest companies by market cap in the Nasdaq 100 index.
Top Holdings: Apple, Nvidia, Microsoft.
Expense Ratio: 0.20%
iShares Nasdaq-100 ex-Top 30 ETF (QNXT)
Objective: Focuses on companies ranked 31 to 100 by market cap in the Nasdaq 100.
Top Holdings: Micron Technology (MU), Starbucks (SBUX), Gilead Sciences (GILD).
Expense Ratio: 0.20%
BlackRock also announced that UC Investments, the venture capital arm of the University of California, has been selected as an early investor in the iShares Nasdaq Top 30 Stocks ETF. UC Investments manages an asset portfolio worth approximately $180 billion.