US Large Cap Broad Index ETFs
By SA Editors
US Large Cap Broad Index ETFs List
(click on symbol for data and articles)
"Mega" Cap Traditional Index ETFs
iShares S&P 100 Index Fund (OEF)
Rydex Russell Top 50 ETF (XLG)Large Cap Traditional Index ETFs
SPDR S&P 500 ETF (SPY)
iShares S&P 500 Index Fund (IVV)
iShares Russell 1000 Index Fund (IWB)
iShares Morningstar Large Core Index Fund (JKD)
SPDR DJ Wilshire Large Cap ETF (ELR)
Vanguard Large-Cap ETF (VV)Large Cap Equal-Weight Index ETFs
Rydex S&P Equal Weight ETF (RSP)Large Cap Leveraged ETFs
ProShares Ultra QQQ ETF (QLD)
ProShares Ultra S&P500 ETF (SSO)Large Cap Dividend ETFs
WisdomTree LargeCap Dividend Fund (DLN)Large Cap Fundamental ETFs
WisdomTree Earnings 500 Fund (EPS)
WisdomTree Earnings Top 100 Fund (EEZ)Large Cap Quant Strategy ETFs
PowerShares Dynamic Large Cap Portfolio (PJF)Large Cap Short ETFs
ProShares Short QQQ ETF (PSQ)
ProShares Short S&P500 ETF (SH)
ProShares UltraShort QQQ ETF (QID)
ProShares UltraShort S&P500 ETF (SDS)Large Cap ETFs Defined by Stock Exchange
iShares NYSE 100 Index Fund (NY)
PowerShares QQQ (QQQQ)
What Are They?
- The definition of large cap stocks varies by index provider. For example, S&P defines "large cap" as companies with a market cap of $4 billion or greater, while Dow Jones takes the largest 5,000 stocks and places stocks ranked 1 to 750 in the Wilshire Large-Cap Index.
- The ETFs in the list provide four fundamentally different approaches to investing: (1) traditional market-cap weighted indexing, (2) equal weighting every stock in an index, (3) fundamental weighting based on earnings or dividends, and (4) rules-based "quant" investing, such as selecting stocks based on P/E ratios and other quantitative metrics.
- Leveraged and short ETFs use traditional market-cap based indexes, and offer vehicles to bet against the index or to increase exposure to the index above 100%.
Why & How To Use Them
- US Large Cap traditional index ETFs tend to be cheap -- the S&P 500 ETFs from iShares (IVV) and State Street (SPY) are probably the cheapest equity funds in the world as measured by expense ratio.
- Large cap broad index ETFs are attractive to short-term traders because they tend to be highly liquid, so they're easy to buy and sell and the buy-sell spreads tend to be narrow.
- For long term investors, the best way to cover US stocks in an ETF portfolio is to use a group of 3 ETFs -- large cap, mid cap and small cap -- or a single total market ETF. Opting for the large/mid/small cap approach allows greater opportunity for rebalancing, but results in more ETFs to manage in your portfolio.
- Try not to mix underlying indexes. Stick with all S&P, all Russell, all Wilshire or all Dow Jones.
What to Look Out For
- Some of the ETFs within the same family overlap. The S&P 100 Index Fund (OEF), for example, is a sub-set of the S&P 500 Index Fund (IVV).
- ETFs defined by stock exchange, such as the NYSE Composite (NYC) and Nasdaq (QQQQ), may be a poor fit for diversified portfolios. See Further Reading below.
- The Morningstar series ETFs may be less liquid than other ETFs. Morningstar was late to the game and the ETFs were redundant by the time they arrived, so the ETFs suffer from lower liquidity than others, sometimes resulting in wider buy-sell spreads.
Further Reading
- The arguments against owning ETFs defined by stock exchange are outlined in Why You Shouldn't Own DIA, SPY or QQQQ.
- For more on the leveraged ETFs listed here, see Leveraged Market Cap ETFs, and for more on the dividend ETFs see US Market Cap, Dividend-Weighted ETFs.
- Articles about individual ETFs listed here: Should You Use an Equal-Weight S&P 500 Fund Instead of a Market-Cap Weighted Fund (RSP versus SPY or IVV)? (David Jackson), And Now Something Completely the Same - Rydex Launches XLG (Roger Nusbaum).
This page is part of The Seeking Alpha ETF Selector which sorts ETFs by type, highlights how to use them and what to look out for, and provides links to articles that discuss key issues for investors.
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