iShares Core S&P Total US Stock Mkt ETF | ITOT |
Morningstar's Take
|19/02/2025by Brendan McCann
| IShares Core S&P Total US Stock Market ETF offers highly efficient, well-diversified exposure to the US stock market while charging rock-bottom fees—a recipe for success over the long run. The fund tracks the S&P Total Market Index, which selects all investable US stocks and weights them by market cap. As a result, the index experiences little turnover, since the size of additions or deletions to the existing portfolio are miniscule. Stocks must pass an investability screen that ensures funds can effectively track the index. The end portfolio is well-diversified and accurately resembles the US stock market, including the large- and mid-cap opportunity set available to active peers. This allows the strategy to capitalize on its low fee and low turnover, which can help drive category-relative outperformance. The bedrock of this strategy is market-cap weighting, which harnesses the market's collective wisdom of each stock’s relative value. It’s a sensible approach because the market tends to do a good job pricing large-cap stocks. Large, heavily traded markets tend to reflect new information quickly and are well-suited for indexing. Market-cap weighting may expose the strategy to stock- or sector-level concentration risk when a few richly valued companies or sectors power most of the market’s gains. At the end of 2024, its top 10 holdings made up the largest portion of the index (32%) in several decades, and its 32% allocation to technology stocks was the highest since the index’s creation in 2006. But this is not a fault in design. The S&P Total Market Index simply reflects the market’s composition. In the long run, its broad diversification, low turnover, and low fee outweigh these risks. |
A one-stop shop for most US stocks.To find out how Morningstar rates a fund click here.
| Morningstar Pillars | |
| Pessoas | Above Average |
| Parent | Above Average |
| Processo | High |
Morningstar Medalist RatingMorningstar assigns the Medalist Rating to funds that are qualitatively and quantitatively assessed through manager research and algorithmic processes. The assessment turns on three key “pillars” – People, Process, and Parent – that yield an estimate of how well a fund will perform before fees but after adjusting for risk.
