iShares Files for 3 Russell Top 200 ETFs

Includes: MGC, MGK, MGV, PMA
by: Michael Johnston

In the weeks since its sale to BlackRock was announced, the team at iShares has been busy expanding its reach, launching the first Peru-specific ETF as well as the S&P Emerging Markets Infrastructure ETF (NASDAQ:EMIF). And the Goliath of the ETF space is showing no signs of slowing down any time soon, recently filing for approval on three new funds that would track Russell Top 200 Indexes.

iShares filed for a new ETF to track the Russell Top 200 Index, which includes the largest 200 companies (by market capitalization) of the broader Russell 3000 Index. In addition, prospectuses for funds tracking the Russell Top 200 Growth Index and Russell Top 200 Value Index were released. The Russell Top 200 Index represents approximately 65% of the market capitalization of listed U.S. equities, and is a popular benchmark for large cap funds. The growth index includes approximately 74% of the Russell Top 200, while the value benchmark includes about 64% of the Top 200 holdings.

While new iShares funds are generally well received, these latest launches will likely come across some stiff competition, as the mega-cap ETF space is already relatively crowded. Existing funds offering similar exposure include:

  • Vanguard Mega Cap 300 Index ETF (NYSEARCA:MGC)
  • Vanguard Mega Cap 300 Growth Index ETF (NYSEARCA:MGK)
  • Vanguard Mega Cap 300 Value Index ETF (NYSEARCA:MGV)
  • PowerShares Active Mega Cap (NYSEARCA:PMA)

The Vanguard funds listed above have expense ratios of only 13 basis points, compared to 0.20% for the iShares funds, another obstacle that may be difficult for the new ETFs to overcome.

Separately, Russell recently began the process of securing approval for its own line of ETFs, some of which may track various Russell indexes.

Disclosure: No positions at time of writing.