Should WisdomTree U.S. MidCap ETF (EZM) Be on Your Investing Radar?
The WisdomTree U.S. MidCap ETF (EZM) was launched on 02/23/2007, 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 Wisdomtree. It has amassed assets over $792.55 million, making it one of the average sized ETFs attempting to match the Mid Cap Value segment of the US equity market.
Why Mid Cap Value
Compared to large and small cap companies, mid cap businesses tend to have higher growth prospects and are less volatile, respectively, with market capitalization between $2 billion and $10 billion. Thus, companies that fall under this category provide a stable and growth-heavy investment.
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. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth 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 0.38%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.28%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 20.90% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Toll Brothers Inc (TOL) accounts for about 0.97% of total assets, followed by Dick\''s Sporting Goods Inc (DKS) and Unum Group (UNM).
The top 10 holdings account for about 7.08% of total assets under management.
Performance and Risk
EZM seeks to match the performance of the WisdomTree U.S. MidCap Earnings Index before fees and expenses. The WisdomTree U.S. MidCap Index is a fundamentally weighted index that measures the performance of earnings-generating companies within the mid-capitalization segment of the U.S. Stock Market.
The ETF has added roughly 5.60% so far this year and was up about 10.33% in the last one year (as of 07/22/2024). In the past 52-week period, it has traded between $47.01 and $61.92.
The ETF has a beta of 1.20 and standard deviation of 21.07% for the trailing three-year period, making it a medium risk choice in the space. With about 546 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. MidCap 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, EZM is a sufficient option for those seeking exposure to the Style Box - Mid Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
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 $13.01 billion in assets, Vanguard Mid-Cap Value ETF has $16.56 billion. IWS has an expense ratio of 0.23% and VOE charges 0.07%.
Bottom-Line
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.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
Get it free >>WisdomTree U.S. MidCap ETF (EZM): ETF Research Reports
Unum Group (UNM) : Free Stock Analysis Report
DICK'S Sporting Goods, Inc. (DKS) : Free Stock Analysis Report
Toll Brothers Inc. (TOL) : Free Stock Analysis Report
Vanguard Mid-Cap Value ETF (VOE): ETF Research Reports
iShares Russell Mid-Cap Value ETF (IWS): ETF Research Reports
