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

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.

While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Further, growth stocks have a higher level of volatility associated with them. 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

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain 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 0.39%.

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 47.1% of the portfolio. Telecom and Financials round out the top three.

Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 17.44% of total assets, followed by Apple Inc (AAPL) and Alphabet Inc Class A (GOOGL).

The top 10 holdings account for about 72.04% 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 return is roughly 3.86% so far this year and it's up approximately 14.99% in the last one year (as of 07/28/2026). In the past 52-week period, it has traded between $27.64 and $34.42.

The ETF has a beta of 1.12 and standard deviation of 19.43% 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 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, TOPT is an excellent 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 $215.74 billion in assets, Invesco QQQ has $448.70 billion. VUG has an expense ratio of 0.03% and QQQ charges 0.18%.

Bottom-Line

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also 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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This article originally published on Zacks Investment Research (zacks.com).

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