Should iShares Top 20 U.S. Stocks ETF (TOPT) Be on Your Investing Radar?

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 fund is sponsored by Blackrock. It has amassed assets over $483.89 million, making it one of the average sized ETFs attempting to match the Large Cap Growth segment of the US equity market.

Why Large Cap Growth

Large cap companies usually have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.

Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. When you consider growth versus value, growth stocks are usually the clear winner in strong bull markets but tend to fall flat in nearly all other environments.

Costs

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 0.2%, making it one of the cheaper products in the space.

It has a 12-month trailing dividend yield of 0.42%.

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 Information Technology sector -- about 45.9% of the portfolio. Financials and Telecom round out the top three.

Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 15.57% of total assets, followed by Apple Inc (AAPL) and Microsoft Corp (MSFT).

The top 10 holdings account for about 70.37% of total assets under management.

Performance and Risk

TOPT seeks to match the performance of the S&P 500 TOP 20 SELECT INDEX before fees and expenses. The S&P 500 Top 20 Select Index composes of the 20 largest U.S. companies by market capitalization within the S&P 500 Index.

The ETF has lost about 7.31% so far this year and is up about 19.81% in the last one year (as of 03/24/2026). In the past 52-week period, it has traded between $21.25 and $31.88.

The ETF has a beta of 1.08 and standard deviation of 19.9% for the trailing three-year period. With about 25 holdings, it has more concentrated exposure than peers.

Alternatives

iShares Top 20 U.S. Stocks 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, TOPT is a great option for investors seeking exposure to the Style Box - Large Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.

The Vanguard Growth Index Fund ETF Shares (VUG) and the Invesco QQQ (QQQ) track a similar index. While Vanguard Growth Index Fund ETF Shares has $190.76 billion in assets, Invesco QQQ has $381.34 billion. VUG has an expense ratio of 0.03% and QQQ charges 0.18%.

Bottom-Line

Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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 Top 20 U.S. Stocks ETF (TOPT): ETF Research Reports

This article originally published on Zacks Investment Research (zacks.com).

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