This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

2 ETFs for Mega-Cap Purists

Stocks in this article: SPY EWZ IOO AAPL XOM GE

NEW YORK ( TheStreet) - Despite persistent economic and political challenges facing regions of the globe such as Europe and Egypt, the markets have gotten off to a promising start in 2011.

Amidst this strength, mega-cap companies, in particular, have fallen into focus. Although they are typically heralded for their stability through any type market conditions, the companies considered to be the world's largest have carved out some of the most staggering gains of all style categories.

The impressive strength of mega-cap companies is attractive and promising for conservative investors who have long relied on these quality firms to ensure portfolio stability over the long run. Interestingly, although they rank as the most influential players within the business world, finding a way to gain pure play access to industry leaders can be a tricky task. Currently, only a small number of funds are available which specifically to target these goliaths.

Many broad-based domestic and internationally-focused ETFs such as the SPDR S&P 500 ETF (SPY) and iShares MSCI Brazil Index Fund (EWZ) are dominated by market leaders such as Apple (AAPL), Exxon Mobil (XOM) and Petroleo Brasileiro (PBR). However, upon digging into these funds' respective portfolios, smaller names show up as well.

While the inclusion of these firms provides instant diversification, ensures that the fund properly represents the target nation's total market, and can even provide a welcomed pop, they leave something to be desired for style-focused investors looking specifically for mega caps.

True mega-cap purists should instead turn to the iShares S&P Global 100 Index Fund (IOO) and the iShares S&P Asia 50 Index Fund (AIA). By combining these two funds, investors can not only gain exposure to a wide range of market giants, but also do so from a global perspective.

IOO's index is designed to focus solely on the largest names in the business world. The fund is headlined by companies including Exxon Mobil (XOM), General Electric (GE), Microsoft (MSFT), International Business Machines (IBM) and HSBC (HBC). In total, the fund's top 10 positions represent slightly over a quarter of its index.

Interestingly, although its name implies an expansive global reach, the vast majority of IOO's portfolio is heavily dedicated to the biggest names from the West. The United States and Europe command the largest slices of the fund's index, accounting for 90% of the fund's geographic breakdown.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs