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Expands ETF line-up with large-cap stocks bet

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Sees potential for outsized gains

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68% of S&P 500 returns over 3 years from top 20 largest

firms -

BlackRock ( BLK )

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Taps University of California as early investor in one ETF

By Niket Nishant and Manya Saini

Oct 24 (Reuters) - BlackRock ( BLK ) has launched three

new exchange-traded funds (ETFs), including two that offer

exposure to the largest U.S. stocks and one designed to avoid

them, reflecting asset managers' efforts to provide more

tailored investment options.

The sustainability of the rally in mega-cap stocks has been

one of the biggest talking points among investors. While

advocates tout their outsized gains, critics are worried about

frothy valuations and concentration risk.

Offering various options will allow BlackRock ( BLK ) to tap the

demand for equities regardless of investor preferences.

"The beauty of these ETFs is that they can be used by

investors looking for more targeted exposure to mega-caps or

those looking to diversify their exposure to large companies,"

said Rachel Aguirre, BlackRock's ( BLK ) U.S. Head of iShares Products.

The iShares Top 20 U.S. Stocks ETF will offer

access to the 20 largest U.S. companies.

The iShares Nasdaq Top 30 Stocks ETF will let

investors hold the 30 biggest non-financial stocks, including

mega-cap tech. It has secured backing from the University of

California's investing arm.

The third product, the iShares Nasdaq-100 ex Top 30 ETF

, will invest beyond the behemoths in the hopes of

capturing the growth of relatively smaller tech firms.

The launch comes days after BlackRock ( BLK ) debuted two ETFs to

tap into the booming artificial intelligence space, leaning into

thematic ETFs even as such funds lose their appeal.

MEGA CAP RETURNS

The top 20 companies in the S&P 500 have contributed

more than two-thirds of the index's returns over the past three

years, BlackRock ( BLK ) said.

Roundhill Magnificent Seven ETF, which targets the

so-called 'Magnificent Seven' tech giants, is up 40% in 2024.

BlackRock ( BLK ) holds a portfolio of over 1,400 ETFs under its

iShares business with more than $4.2 trillion in assets under

management, as of Sept. 30. ETF inflows have been key to its

growth strategy in recent years.