Designed to provide broad exposure to the Style Box - Mid Cap Value category of the market, the WisdomTree U.S. MidCap ETF (EZM) is a smart beta exchange traded fund launched on 02/23/2007.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
EZM is managed by Wisdomtree, and this fund has amassed over $850.75 million, which makes it one of the average sized ETFs in the Style Box - Mid Cap Value. This particular fund, before fees and expenses, 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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Operating expenses on an annual basis are 0.38% for EZM, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.20%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
For EZM, it has heaviest allocation in the Financials sector --about 19.20% of the portfolio --while Consumer Discretionary and Industrials round out the top three.
Looking at individual holdings, Fox Corp - Class A (FOXA) accounts for about 0.88% of total assets, followed by Ovintiv Inc (OVV) and Aptiv Holdings Ltd (APTV).
The top 10 holdings account for about 7.34% of total assets under management.
Performance and Risk
The ETF has added about 1.38% so far this year and is up roughly 11.20% in the last one year (as of 02/13/2025). In the past 52-week period, it has traded between $56.57 and $68.19.
EZM has a beta of 1.21 and standard deviation of 21.03% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 560 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 $13.65 billion in assets, Vanguard Mid-Cap Value ETF has $17.64 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
Fox Corporation (FOXA) : Free Stock Analysis Report
Vanguard Mid-Cap Value ETF (VOE): ETF Research Reports
iShares Russell Mid-Cap Value ETF (IWS): ETF Research Reports
Aptiv PLC (APTV) : Free Stock Analysis Report
Ovintiv Inc. (OVV) : Free Stock Analysis Report
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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.
