IShares Core S&P Total US Stock Market ETF ITOT offers exposure to the entire investable U.S. stock market. It effectively combines a broadly diversified portfolio with low turnover and a miniscule price, providing it with a durable edge over peers. It earns a Morningstar Analyst Rating of Gold.

The fund tracks the S&P Total Market Index, which is a market-cap-weighted basket of nearly every investable U.S. stock. As its name suggests, the index includes all U.S.-domiciled stocks that trade on a major U.S. exchange and pass S&P’s minimum liquidity criteria. The index does not have minimum market-cap or profitability requirements, unlike S&P Composite indexes such as the S&P 500. Its small- and micro-cap exposures, though not substantial, can provide a performance edge over its Morningstar Category peers when smaller stocks rally. 
  
The largest stocks in the United States which make up the bulk of the portfolio,  attract liquidity and widespread attention, such that new information is quickly reflected in their prices. Market-cap weighting is a sensible approach here. It harnesses the market’s collective wisdom of the relative value of each holding with the added benefit of low turnover and associated trading costs. 

Total-market funds mitigate transaction costs because they don’t target specific segments of the market and aren’t prone to forced buying or selling as a result of stocks entering or exiting a market segment. This limits unnecessary turnover and associated trading costs. 

However, market-cap weighting may expose the index to significant stock- or sector-level concentration during the market’s intermittent manic episodes. This can tilt the portfolio toward richly valued names or sectors, as was the case during the post-lockdown rally in 2020. In the long run, the benefits of broad diversification, low turnover, and a low fee outweigh these drawbacks.

Analyst Rating

Outstanding total-market fund.

Associate Analyst

Mo'ath Almahasneh

Microsoft

Apple

Amazon

NVIDIA

Alphabet

Tesla

Berkshire Hathaway Inc. - Ordinary Shares - Class B

UnitedHealth Group

This broadly diversified portfolio is representative of the entire investable U.S. equity market. It leverages the market’s collective wisdom to size its positions and enjoys low turnover as a result. It earns a High Process Pillar rating.

High

Process

BlackRock's industry-leading technology, global footprint, and extensive supporting cast earn an Above Average People Pillar rating. The team employs BlackRock's Aladdin platform to fulfill much of its portfolio management tasks, and global trading desks allow traders to conduct foreign transactions in a cost-effective way.

The iShares team has endured had some turnover over the past few in recent years. But index-tracking performance should remain tight, thanks to heavily automated processes and several long-tenured managers that remain at the helm. Amy Whitelaw left the team in February 2023 for another role within the organization. Rachel Aguirre left the team in March 2021 after she was promoted to iShares head of product engineering. Paul Whitehead replaced Alan Mason as a manager in January 2022, when Mason left to focus on the firm's customized institutional indexing capabilities. IShares has yet to name a successor for Whitelaw, but they will join a seasoned group in Greg Savage and Jennifer Hsui, who will continue to oversee this fund and have helped manage iShares ETFs since the early 2000s.

These managers interact with a wider team of traders and managers around the globe to execute the fund's day-to-day operations. The larger number of managers also limits the impact of personnel turnover when it does occur. A portion of their compensation is tethered to index-tracking performance, which aligns manager interests with those of the fund's investors.

Above Average

People

BlackRock offers compelling options across asset classes and vehicles. It earns an Above Average rating for Parent. 
The firm’s approximately USD 8 trillion in assets under management, as of Sept. 30, 2022, gives it unparalleled scale and influence. It is a market-leading index fund provider globally, and its iShares exchange-traded fund franchise offers a low-cost lineup of core funds that investors can use to build a well-diversified portfolio for dirt cheap. The firm can be more adventurous in its ETF launches than some peers, so not everything it launches is appropriate for the masses. As a result, it is likely to have more ETF closures than peers that stick to the basic building blocks.  
The firm’s active fixed-income and multi-asset efforts also stand out as some of the best in the industry. Those benefit from BlackRock’s commitment to building a first-class risk management system via its Aladdin analytics software. The software is also available for sale to other firms and has proved to be a popular option for competitors, a testament to its usefulness. 
More recently, the firm has shifted its focus to ESG offerings and incorporating ESG across its investment lineup, leading to a political backlash in the United States.
BlackRock isn’t the best at everything it tries to do, but retail investors, financial advisors, and large institutions could all build robust portfolios using BlackRock’s products.

Parent

iShares Core S&P Total U.S. Stock Market ETF

ITOT tracks a market cap-weighted index of all common equities listed on the NYSE and the NASDAQ.

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iShares Total Stock Market ETF offers diversification and a low expense ratio compared to other index ETFs. ITOT's top holdings are similar to other index ETFs, with a heavy focus on technology. ITOT has underperformed both the Russell 3000 ETF and the S&P 500 ETF over the last five years, despite its added diversification.

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Diversification has not worked well this year, with large-cap tech stocks outperforming other sectors. The iShares Core S&P Total U.S. Stock Market ETF (ITOT) offers broad exposure to the entire U.S. stock market, including large-cap, mid-cap, and small-cap stocks. ITOT has low fees, tax efficiency, and potential for future growth, making it a compelling investment option for diversified portfolios.

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