Should BNY Mellon US Large Cap Core Equity ETF (BKLC) Be on Your Investing Radar?

Designed to provide broad exposure to the Large Cap Blend segment of the US equity market, the BNY Mellon US Large Cap Core Equity ETF BKLC is a passively managed exchange traded fund launched on 04/09/2020.

The fund is sponsored by Bny Mellon. It has amassed assets over $2.06 billion, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.

Why Large Cap Blend

Large cap companies typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.

Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.

Costs

Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.

Annual operating expenses for this ETF are 0%, making it the least expensive products in the space.

It has a 12-month trailing dividend yield of 1.35%.

Sector Exposure and Top Holdings

While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Information Technology sector--about 29.50% of the portfolio. Healthcare and Financials round out the top three.

Looking at individual holdings, Apple Inc AAPL accounts for about 7.23% of total assets, followed by Microsoft Corp MSFT and Amazon.com Inc AMZN.

The top 10 holdings account for about 30.56% of total assets under management.

Performance and Risk

BKLC seeks to match the performance of the MORNINGSTAR U.S. LARGE CAP INDEX before fees and expenses. The Morningstar US Large Cap Index is a float-adjusted market capitalization weighted index designed to measure the performance of U.S. large-capitalization stocks.

The ETF has added roughly 0.27% so far this year and is up about 26.04% in the last one year (as of 01/16/2024). In the past 52-week period, it has traded between $70.97 and $90.80.

The ETF has a beta of 1.03 and standard deviation of 18.02% for the trailing three-year period. With about 510 holdings, it effectively diversifies company-specific risk.

Alternatives

BNY Mellon US Large Cap Core Equity ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, BKLC is a sufficient option for those seeking exposure to the Style Box - Large Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.

The iShares Core S&P 500 ETF IVV and the SPDR S&P 500 ETF SPY track a similar index. While iShares Core S&P 500 ETF has $403.55 billion in assets, SPDR S&P 500 ETF has $483.81 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.

Bottom-Line

While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

Zacks Investment Research