iShares Top 20 U.S. Stocks ETF

TOPT

Market cap $464M

TOPT holds only the 20 largest U.S. stocks with quarterly rebalancing. Three holdings (NVIDIA, Apple, Microsoft) comprise 42% of the fund. The fund charges 0.20% annually versus 0.03% for VOO. VOO includes the same top 20 stocks plus 480 additional companies for diversification.

Designed to provide broad exposure to the Large Cap Growth segment of the US equity market, the iShares Top 20 U.S. Stocks ETF (TOPT) is a passively managed exchange traded fund launched on October 23, 2024.

The iShares Top 20 U.S. Stocks ETF offers extreme concentration in mega caps, diverging sharply from both MGC and SPY sector allocations. TOPT's high concentration amplifies both potential returns and risks, making it more sensitive to price changes and less diversified than MGC or SPY. While TOPT has recently outperformed due to mega-cap strength, its structure is more suitable for tactical, bullish stances on top holdings rather than core portfolios.

Launched on October 23, 2024, the iShares Top 20 U.S. Stocks ETF (TOPT) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Growth segment of the US equity market.

Rob Isbitts from Sungarden Investors Club talks again to analysts Julia Ostian, Jack Bowman, and Kenio Fontes. Market risks are rising as valuations stretch, yield curves steepen, and concentration in mega-cap tech increases vulnerability.

The S&P 500 is acting more like a 20-50 stock index all the time. I think it's time investors take notice of that. While TOPT, an iShares ETF that launched last year, is a good way to investing in the 20 largest S&P 500 stocks, it is also a nice stock scouting tool. I introduce here some of my ongoing research into the topic of "do we really need to own a 500-stock index?"

I maintain my buy rating on iShares Top 20 U.S. Stocks ETF, as its focus on the largest U.S. stocks continues to deliver outperformance versus the S&P 500. TOPT's concentrated exposure to mega-cap tech and diversified large caps positions it for strong returns in bullish markets and resilience in downturns. The fund's low expense ratio, reasonable valuation, and accessible share price make it an attractive vehicle for high-risk tolerance investors seeking large-cap growth.

If you're interested in broad exposure to the Large Cap Growth segment of the US equity market, look no further than the iShares Top 20 U.S. Stocks ETF (TOPT), a passively managed exchange traded fund launched on 10/23/2024.

TOPT offers concentrated exposure to the U.S. equity market by picking the largest 20 companies based on market cap. While an aggressive approach like this may be justified in bull markets in general, current risks make the fund too risky to hold. Amid a weakening labor market and inflationary pressure threats, the current market optimism creates vulnerability for investors, and buying or adding to TOPT is not warranted.

The iShares Top 20 U.S. Stocks ETF offers concentrated exposure to the largest U.S. companies. TOPT has delivered strong performance thus far and has realized modestly higher levels of volatility than broad-based indexes. I am bullish on a number of TOPT's largest holdings.