Looking for broad exposure to the Mid Cap Blend segment of the US equity market? You should consider the iShares Core S&P Mid-Cap ETF (IJH), a passively managed exchange traded fund launched on 05/22/2000.
The fund is sponsored by Blackrock. It has amassed assets over $63.86 billion, making it the largest ETFs attempting to match the Mid Cap Blend segment of the US equity market.
Why Mid Cap Blend
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. These types of companies, then, have a good balance of stability and growth potential.
Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
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 counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.05%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.67%.
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 Industrials sector--about 22.60% of the portfolio. Consumer Discretionary and Financials round out the top three.
Looking at individual holdings, Axon Enterprise Inc (AXON) accounts for about 0.71% of total assets, followed by Reliance Steel & Aluminum (RS) and Hubbell Inc (HUBB).
The top 10 holdings account for about 5.99% of total assets under management.
Performance and Risk
IJH seeks to match the performance of the S&P MidCap 400 Index before fees and expenses. The S&P MidCap 400 Index measures the performance of the mid-capitalization sector of the U.S. equity market.
The ETF has added roughly 0.24% so far this year and it's up approximately 3.38% in the last one year (as of 05/25/2023). In the past 52-week period, it has traded between $219.07 and $271.72.
The ETF has a beta of 1.12 and standard deviation of 22.07% for the trailing three-year period, making it a medium risk choice in the space. With about 416 holdings, it effectively diversifies company-specific risk.
IShares Core S&P Mid-Cap 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, IJH is a good option for those seeking exposure to the Style Box - Mid Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell Mid-Cap ETF (IWR) and the Vanguard Mid-Cap ETF (VO) track a similar index. While iShares Russell Mid-Cap ETF has $26.51 billion in assets, Vanguard Mid-Cap ETF has $49.95 billion. IWR has an expense ratio of 0.18% and VO charges 0.04%.
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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