(I500) iShares SP500 Swap USD - Ratings and Ratios

The iShares S&P 500 Swap UCITS ETF USD (Acc) (AS:I500) is a UCITS-compliant exchange-traded fund domiciled in Ireland, designed to provide exposure to U.S. large-cap equities. It tracks the Morningstar US Large-Mid NR USD Index, which focuses on a mix of large and mid-cap companies in the U.S. market. The fund is managed by BlackRock, one of the worlds largest asset managers, and is listed on the Euronext Amsterdam exchange under the ticker symbol I500.

With an AUM of approximately $8.945 billion, this ETF is one of the larger funds in its category, indicating strong investor demand and liquidity. The fund operates as a swap-based ETF, which means it uses derivatives to gain exposure to the underlying index. This structure allows the fund to avoid withholding taxes on U.S. dividends, making it more tax-efficient for non-U.S. investors. However, swap-based ETFs carry counterparty risk, as they rely on financial institutions to honor their derivative contracts.

The ETFs expense ratio is relatively low, at 0.20% per annum, making it a cost-effective way to gain exposure to U.S. large-cap equities. The fund is structured as an accumulation share class, meaning that income generated by the underlying assets is reinvested rather than distributed as dividends. This feature can be advantageous for long-term growth investors seeking compounding returns.

From a portfolio construction perspective, this ETF provides diversified exposure to the U.S. large-cap market, with holdings across various sectors. The Morningstar index it tracks is designed to include companies that are considered investable based on liquidity and market capitalization criteria. The funds swap-based replication method means it does not hold the physical securities in the index, which can sometimes lead to tracking error, though BlackRocks robust risk management typically keeps this in check.

For investors and fund managers, this ETF offers a convenient way to gain U.S. equity exposure while benefiting from the UCITS framework, which ensures regulatory compliance and investor protections. The funds Irish domicile also provides certain tax advantages for investors in eligible jurisdictions. However, as with any swap-based ETF, its important to monitor the funds collateral holdings and counterparty arrangements to assess potential risks.