If you're interested in broad exposure to the Mid Cap Growth segment of the US equity market, look no further than the iShares Russell Mid-Cap Growth ETF (IWP), a passively managed exchange traded fund launched on 07/17/2001.
The fund is sponsored by Blackrock. It has amassed assets over $16.70 billion, making it the largest ETFs attempting to match the Mid Cap Growth segment of the US equity market.
Why Mid Cap Growth
Mid cap companies have market capitalization between $2 billion and $10 billion. They usually have higher growth prospects than large cap companies and are less volatile than small cap companies. These types of companies, then, have a good balance of stability and growth potential.
Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.
Costs
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 0.23%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.42%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, 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 28.30% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Palantir Technologies Inc Class A (PLTR) accounts for about 5.77% of total assets, followed by Applovin Corp Class A (APP) and Ameriprise Finance Inc (AMP).
The top 10 holdings account for about 19.93% of total assets under management.
Performance and Risk
IWP seeks to match the performance of the Russell MidCap Growth Index before fees and expenses. The Russell Midcap Growth Index measures the performance of the mid-capitalization growth sector of the U.S. equity market. It is a subset of the Russell Midcap Index, which measures the performance of the mid-capitalization sector of the U.S. equity market & approximately 47% of the total market value of the Russell Midcap Index.
The ETF has lost about -4.70% so far this year and was up about 9.13% in the last one year (as of 03/18/2025). In the past 52-week period, it has traded between $103.87 and $139.60.
The ETF has a beta of 1.16 and standard deviation of 21.83% for the trailing three-year period, making it a medium risk choice in the space. With about 293 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Russell Mid-Cap Growth ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IWP is an outstanding option for investors seeking exposure to the Style Box - Mid Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares S&P Mid-Cap 400 Growth ETF (IJK) and the Vanguard Mid-Cap Growth ETF (VOT) track a similar index. While iShares S&P Mid-Cap 400 Growth ETF has $8.63 billion in assets, Vanguard Mid-Cap Growth ETF has $15.15 billion. IJK has an expense ratio of 0.17% and VOT charges 0.07%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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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Get it free >>iShares Russell Mid-Cap Growth ETF (IWP): ETF Research Reports
Ameriprise Financial, Inc. (AMP) : Free Stock Analysis Report
AppLovin Corporation (APP) : Free Stock Analysis Report
Vanguard Mid-Cap Growth ETF (VOT): ETF Research Reports
iShares S&P Mid-Cap 400 Growth ETF (IJK): ETF Research Reports
Palantir Technologies Inc. (PLTR) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
