If you're interested in broad exposure to the Mid Cap Blend segment of the US equity market, look no further than the iShares Russell Mid-Cap ETF (IWR), a passively managed exchange traded fund launched on 07/17/2001.
The fund is sponsored by Blackrock. It has amassed assets over $30.68 billion, making it one of the largest ETFs attempting to match the Mid Cap Blend segment of the US equity market.
Why Mid Cap Blend
With market capitalization between $2 billion and $10 billion, mid cap companies usually contain higher growth prospects than large cap companies, and are considered less risky than their small cap counterparts. These types of companies, then, have a good balance of stability and growth potential.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.19%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.44%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 19% of the portfolio. Financials and Information Technology round out the top three.
Looking at individual holdings, Phillips (PSX) accounts for about 0.57% of total assets, followed by Parker-Hannifin Corp (PH) and Amphenol Corp Class A (APH).
The top 10 holdings account for about 5.19% of total assets under management.
Performance and Risk
IWR seeks to match the performance of the Russell MidCap Index before fees and expenses. The Russell Midcap Index measures the performance of the mid-capitalization sector of the U.S. equity market.
The ETF has lost about -0.85% so far this year and was up about 13.45% in the last one year (as of 01/09/2024). In the past 52-week period, it has traded between $64.84 and $78.27.
The ETF has a beta of 1.11 and standard deviation of 19.43% for the trailing three-year period, making it a medium risk choice in the space. With about 818 holdings, it effectively diversifies company-specific risk.
IShares Russell Mid-Cap 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, IWR is a good option for those seeking exposure to the Style Box - Mid Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Mid-Cap ETF (VO) and the iShares Core S&P Mid-Cap ETF (IJH) track a similar index. While Vanguard Mid-Cap ETF has $58.98 billion in assets, iShares Core S&P Mid-Cap ETF has $75.72 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
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.
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