The WisdomTree U.S. MidCap ETF (EZM) made its debut on 02/23/2007, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Mid Cap Value category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is sponsored by Wisdomtree. It has amassed assets over $741.42 million, making it one of the average sized ETFs in the Style Box - Mid Cap Value. Before fees and expenses, EZM seeks to match the performance of the WisdomTree U.S. MidCap Earnings Index.
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.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.38%.
It has a 12-month trailing dividend yield of 1.35%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For EZM, it has heaviest allocation in the Financials sector --about 20.90% of the portfolio --while Industrials and Consumer Discretionary round out the top three.
Taking into account individual holdings, Toll Brothers Inc (TOL) accounts for about 0.94% of the fund's total assets, followed by Unum Group (UNM) and Dick\''s Sporting Goods Inc (DKS).
The top 10 holdings account for about 6.96% of total assets under management.
Performance and Risk
So far this year, EZM has lost about -0.11%, and it's up approximately 5.64% in the last one year (as of 08/06/2024). During this past 52-week period, the fund has traded between $47.01 and $62.44.
EZM has a beta of 1.20 and standard deviation of 21.24% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 544 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. MidCap ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell Mid-Cap Value ETF (IWS) tracks Russell MidCap Value Index and the Vanguard Mid-Cap Value ETF (VOE) tracks CRSP U.S. Mid Cap Value Index. IShares Russell Mid-Cap Value ETF has $12.56 billion in assets, Vanguard Mid-Cap Value ETF has $16.12 billion. IWS has an expense ratio of 0.23% and VOE charges 0.07%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Mid Cap Value.
Bottom Line
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 >>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
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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.
