BlackRock launches a trio of mega-cap oriented ETFs

BlackRock (NYSE:BLK) on Thursday said it had launched three new exchange-traded funds with an aim to help investors diversify their risks across the largest U.S. stocks.

The world’s largest asset manager said two of the ETFs were designed to offer exposure to the biggest companies, while the other ETF was tailored to avoid them.

The new ETFs come at a time when investors are concerned about the heavy weightage of megacap technology stocks and their outsized role in driving Wall Street’s current two-year old bull run.

According to BlackRock (BLK), the top 20 largest companies in the benchmark S&P 500 (SP500) have contributed to 68% of the index’s total return over the past three years.

In the last few months, with inflation moving in the right direction and the Fed delivering a long-awaited interest rate cut, market breadth has improved as investors have gained the confidence to move out of megacap stocks and into other corners of the market.

“The beauty of these ETFs is that they 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 (BLK), said in a statement.

The three ETFs are: the iShares Top 20 U.S. Stocks ETF (NYSEARCA:TOPT), iShares Nasdaq Top 30 Stocks ETF (NASDAQ:QTOP), and iShares Nasdaq-100 ex-Top 30 ETF (NASDAQ:QNXT).

See details about the funds below:

iShares Top 20 U.S. Stocks ETF (TOPT)

• Fund Objective: Invests in the 20 largest U.S. companies by market capitalization within the S&P 500 index.
• Number of Holdings: 20.
• Top Three Holdings: Apple (AAPL), Nvidia (NVDA), and Microsoft (MSFT).
• Expense Fee: 0.20%.

iShares Nasdaq Top 30 Stocks ETF (QTOP)

• Fund Objective: Invests in the 30 largest companies by market capitalization within the Nasdaq 100 index.
• Number of Holdings: 30.
• Top Three Holdings: Apple (AAPL), Nvidia (NVDA), and Microsoft (MSFT).
• Expense Fee: 0.20%.

iShares Nasdaq-100 ex-Top 30 ETF (QNXT)

• Fund Objective: Invests in the 31st to 100th largest companies by market capitalization within the Nasdaq 100 index.
• Number of Holdings: 30.
• Top Three Holdings: Micron Technology (MU), Starbucks (SBUX), and Gilead Sciences (GILD).
• Expense Fee: 0.20%.

BlackRock (BLK) said it had tapped the University of California’s venture arm as an early investor in the iShares Nasdaq Top 30 Stocks ETF (QTOP). UC Investments currently manages a portfolio with assets of about $180B.

These new ETFs come just two days after BlackRock (BLK) said it had launched two new funds centered on technology growth and artificial intelligence.