The iShares Top 20 U.S. Stocks ETF (TOPT) is designed to capture market performance by isolating the largest enterprise leaders in the U.S. market. That covers nearly half the S&P 500 Index's ($SPX) total market capitalization. But chances are you probably haven't heard of this ETF. 

Despite being part of the huge iShares lineup, TOPT, which debuted less than two years ago, is puny in size compared to the more established SPDR S&P 500 Trust ETF (SPY) and the Invesco QQQ ETF (QQQ). And while it has underperformed that pair over the past 12 months, TOPT is perhaps the best way an investor could bet on mega-cap stocks. Instead of spreading capital across hundreds of companies, TOPT strips out the mid-caps and smaller S&P 500 constituents to build a highly concentrated portfolio.

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At 34x trailing 12-month earnings, TOPT's portfolio isn't cheap. That makes sense, since low valuation has not been a feature of mega-cap stock investing for a while. 

How focused is TOPT? Here are all 20 stock holdings. It resets to the top 20 by S&P 500 weight at each quarterly index reconstitution period. Notable to me is that even among the biggest of the big in U.S. stocks, the top four companies (five tickers since Alphabet (GOOG) (GOOGL) has two) comprise 50% of TOPT's total portfolio. 

This ETF's sector allocation is also focused. Technology is naturally the biggest, with Communication Services and Consumer Discretionary adding up to roughly three-quarters of total portfolio weight.

Why Has TOPT Done So Well? 

In a market regime dominated by the AI trade, historic spending on computing power, cloud expansion, and corporate buybacks, mega-cap balance sheets have outperformed smaller equity tiers. TOPT cuts out the bottom 480 stocks in the S&P 500, concentrating capital entirely in companies with high cash reserves and pricing power.

Broad S&P 500 funds (like SPY) or total market funds carry lagging sectors and debt-heavy firms that act as performance drag during momentum-driven rallies. TOPT, at its core, is really an unhedged bet on corporate scale in the AI era. And while this chart looks neutral to toppy in my view, one has to be careful betting against these AI titans.