The iShares S&P Mid-Cap 400 Value ETF (IJJ) was launched on 07/24/2000, and is a passively managed exchange traded fund designed to offer broad exposure to the Mid Cap Value segment of the US equity market.
The fund is sponsored by Blackrock. It has amassed assets over $8.62 billion, making it one of the larger ETFs attempting to match the Mid Cap Value segment of the US equity market.
Why Mid Cap Value
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.
While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. Value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.18%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.72%.
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 Financials sector--about 17.80% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Reinsurance Group Of America Inc (RGA) accounts for about 0.92% of total assets, followed by Cleveland Cliffs Inc (CLF) and Jabil Inc (JBL).
The top 10 holdings account for about 6.54% of total assets under management.
Performance and Risk
IJJ seeks to match the performance of the S&P MidCap 400 Value Index before fees and expenses. The S&P MidCap 400 Value Index measures the performance of the mid-capitalization value sector of the U.S. equity market. It is a subset of the S&P MidCap 400 and consists of those stocks in the S&P MidCap 400 exhibiting the strongest value characteristics.
The ETF has gained about 14.20% so far this year and is up about 10.77% in the last one year (as of 02/06/2023). In the past 52-week period, it has traded between $90 and $116.09.
The ETF has a beta of 1.18 and standard deviation of 31.48% for the trailing three-year period, making it a medium risk choice in the space. With about 308 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares S&P Mid-Cap 400 Value ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IJJ is an excellent option for investors seeking exposure to the Style Box - Mid Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell Mid-Cap Value ETF (IWS) and the Vanguard Mid-Cap Value ETF (VOE) track a similar index. While iShares Russell Mid-Cap Value ETF has $13.72 billion in assets, Vanguard Mid-Cap Value ETF has $17.23 billion. IWS has an expense ratio of 0.23% and VOE charges 0.07%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they 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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Get it free >>iShares S&P Mid-Cap 400 Value ETF (IJJ): ETF Research Reports
Cleveland-Cliffs Inc. (CLF) : Free Stock Analysis Report
Jabil, Inc. (JBL) : Free Stock Analysis Report
Reinsurance Group of America, Incorporated (RGA) : Free Stock Analysis Report
Vanguard Mid-Cap Value ETF (VOE): ETF Research Reports
iShares Russell Mid-Cap Value ETF (IWS): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
