This Day On The Street
Continue to site
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

New iShares Fund Offer Core Building Blocks

The suggested process from iShares begins with "start broad" which means using ITOT for domestic equity exposure, IXUS for foreign equity exposure and AGG for fixed income exposure.

From there investors can "tilt" the portfolio to express opinions about slightly narrower market segments with the other seven core ETFs.

Finally investors can draw upon the many narrow-based funds available from iShares which includes various country, sector and industry funds to round out the portfolio.

The idea of a few core funds combined with other holdings that are more specialized of course makes sense but there are some specifics to what iShares suggests that don't make much sense.

As an example according to the correlation between ITOT (and its predecessor symbol ISI) and IVV has been between 0.96 and a perfect 1.00 the vast majority of the time.

Since ITOT's inception, back when it traded as ISI, in 2004, it is up 29.78%. In that same time IVV is up 26.27% and the path these funds have taken to these results has been identical.

The reason is that both funds have the same top ten holdings. For IVV the top ten add up to 20.62% of the fund and for ITOT the top ten add up to 18.28%. There would seem to be very little utility in owning both IVV and ITOT and there are similar arguments to be made within the foreign equity and fixed income portions of the portfolio.

The domestic core would be accomplished with either ITOT or some combination of IVV, IJH and IJR. An investor not interested in making market cap decisions could simply use ITOT and save the time and expense of owning all four funds.
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
IXUS $49.25 -0.12%
ISTB $100.78 -0.02%
IEFA $53.20 -0.08%
IEMG $40.11 -0.05%
EEM $32.78 -0.03%


Chart of I:DJI
DOW 17,660.71 +9.45 0.05%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs