ITOT's 37% Concentration in Top Ten Holdings Could Make or Break 2026 Returns

"The iShares Core S&P Total U.S. Stock Market ETF ( NYSE:ITOT) returned 16.4% through mid-December, tracking the broad U.S. equity market's strong 2025. With tech stocks dominating returns and the fund trading near its November peak, investors are asking whether another double-digit year is realistic or if the easy gains are behind us. The answer hinges on a handful of macro forces and fund-specific dynamics that will either extend the rally or force a reset."

"ITOT's 2026 performance will track U.S. corporate profit growth more than any other single factor. Analysts project S&P 500 earnings to grow roughly 11% next year, driven by continued expansion in technology and financial sectors. If that forecast holds, ITOT's price appreciation would likely land in the high single digits to low double digits, plus another 1% from dividends. The risk is that estimates prove optimistic."

"ITOT holds over 3,600 stocks, but its top 10 positions account for 37% of assets. Nvidia alone represents 7.3% of the fund. That concentration amplified returns in 2025 as mega-cap tech stocks surged, but it works both ways. If the market rotates toward smaller companies or value stocks in 2026, ITOT's heavy tech weighting could lag. The fund's 33% allocation to information technology is nearly triple its financial sector weight."

ITOT returned 16.4% through mid-December 2025, tracking a strong U.S. equity market. Analysts project S&P 500 earnings to grow roughly 11% in 2026, which would likely translate into high single-digit to low double-digit price appreciation for ITOT plus about 1% in dividends. Fourth-quarter 2025 earnings are expected to decelerate to just over 8%, raising the risk that estimates prove optimistic. ITOT holds over 3,600 stocks but its top 10 positions account for 37% of assets, with Nvidia at 7.3%. The fund's 33% allocation to information technology is nearly triple its financial sector weight. A market rotation toward smaller or value stocks would likely cause ITOT to lag.

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