IShares Russell 3000 ETF IWV offers well-diversified exposure to nearly the entire US stock market while charging a low fee, a recipe for success over the long run. However, there are cheaper alternatives. 

This fund tracks the Russell 3000 Index which selects the largest 3,000 stocks—capturing approximately 98% of the investable US opportunity set. The index weights constituents by market cap after applying liquidity and investability screens to ensure the index is easier to track. 

Market-cap-weighting forms the bedrock of this fund, which harnesses the market's collective wisdom of each holding's relative value with the added benefit of low turnover and trading costs. It's a sensible approach because the market tends to do a good job pricing the stocks that make up the bulk of this portfolio. Larger stocks attract liquidity and widespread investor attention such that prices quickly reflect new information.  

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 when stocks enter or exit a market segment. Still, a small amount of turnover can occur at the lower rungs of the portfolio. This index does not implement buffer rules around its lower market-cap bound to limit unnecessary turnover. Dealing in thinly traded small caps and micro-caps can increase transaction costs compared with similar funds that have buffers. 

This fund includes small- and micro-cap stocks, which improve the end portfolio's diversification and can provide a performance edge when small caps rally, as they did in the fourth quarter of 2020. They tend to be more volatile than large-cap stocks but have minimal impact on portfolio volatility given their small allocation. 

Market-cap-weighting may expose the portfolio to stock- or sector-level concentration risk when a few richly valued companies or sectors power most of the market gains, as was the case at year-end 2023. As of January 2024, the top 10 holdings made up the largest portion of the Russell 3000 Index (27%) in several decades. Likewise, the 28% allocation to technology stocks was the highest since the dot-com bubble. But this is not a fault in design, the Russell 3000 Index simply reflects the market's composition. In the long run, its broad diversification, low turnover, and low fee outweigh these risks.

Analyst Rating

Cheap and broad exposure to all US stocks.

Associate Analyst

Mo'ath Almahasneh

Microsoft

Apple

NVIDIA

Amazon

Alphabet

Berkshire Hathaway Inc. - Ordinary Shares - Class B

Eli Lilly

Broadcom

This fund accurately captures the US stock market opportunity set and benefits from the efficiencies of market-cap-weighting. However, it does not implement buffer rules to limit turnover and transaction costs among the smaller stocks it holds. It earns an Above Average Process Pillar rating.

Above Average

Process

BlackRock's industry-leading technology, global footprint, and extensive supporting cast earn an Above Average People Pillar rating. 

Portfolio managers interact with a wider team of traders and managers around the globe to execute the fund's day-to-day operations. The team is well supported by iShares' extensive internal index research group and centralized dealing desk. The larger number of managers also limits the impact of personnel turnover when it does occur. 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 fund is managed by the iShares US-based team, which has endured some turnover 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. 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 not named a successor for Whitelaw. Greg Savage, Jennifer Hsui, and Whitehead will continue to oversee the fund.

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 Russell 3000 ETF

IWV tracks a cap-weighted index that measures the investable US equities market, covering the entire market-cap spectrum, including micro-caps.

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