"TOPT's top three holdings, NVIDIA, Apple, and Microsoft, represent a combined 40.36% of the portfolio. NVIDIA alone accounts for 16.1%. This concentration leads to significant volatility."
"46% of the fund sits in Information Technology, with no exposure to Industrials, Materials, Utilities, or Real Estate. This lack of diversification increases risk."
iShares Top 20 U.S. Stocks ETF (TOPT) is down 11.06% year-to-date, primarily due to its concentrated portfolio in mega-cap technology stocks. The fund tracks the S&P 500 Top 20 Select Index, holding 20 U.S. companies ranked by market capitalization. While it offers a low-cost investment in dominant businesses, the lack of diversification poses risks. TOPT's top three holdings, NVIDIA, Apple, and Microsoft, make up over 40% of the portfolio, with NVIDIA alone accounting for 16.1%. This concentration leads to significant volatility, as seen in recent declines.
Read at 24/7 Wall St.
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