Looking for broad exposure to the Mid Cap Blend segment of the US equity market? You should consider the Franklin U.S. Mid Cap Multifactor Index ETF (FLQM), a passively managed exchange traded fund launched on 04/26/2017.
The fund is sponsored by Franklin Templeton Investments. It has amassed assets over $1.29 billion, making it one of the average sized ETFs attempting to match the Mid Cap Blend segment of the US equity market.
Why Mid Cap Blend
Mid cap companies, with market capitalization in the range of $2 billion and $10 billion, offer investors many things that small and large companies don't, including less risk and higher growth opportunities. Thus, companies that fall under this category provide a stable and growth-heavy investment.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Costs
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 0.30%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.27%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 23.20% of the portfolio. Consumer Discretionary and Information Technology round out the top three.
Looking at individual holdings, Fair Isaac Corp (FICO) accounts for about 1.64% of total assets, followed by Garmin Ltd (GRMN) and Ww Grainger Inc (GWW).
The top 10 holdings account for about 11.7% of total assets under management.
Performance and Risk
FLQM seeks to match the performance of the LibertyQ U.S. Mid Cap Equity Index before fees and expenses. The LibertyQ U.S. Mid Cap Equity Index includes U.S. mid-capitalization companies that have favorable exposure to four investment style factors - quality, value, momentum and low volatility.
The ETF has added roughly 0.42% so far this year and was up about 16.80% in the last one year (as of 01/07/2025). In the past 52-week period, it has traded between $47.07 and $58.81.
The ETF has a beta of 1.04 and standard deviation of 17.03% for the trailing three-year period. With about 207 holdings, it effectively diversifies company-specific risk.
Alternatives
Franklin U.S. Mid Cap Multifactor Index 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, FLQM 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 Vanguard Mid-Cap ETF (VO) and the iShares Core S&P Mid-Cap ETF (IJH) track a similar index. While Vanguard Mid-Cap ETF has $72.35 billion in assets, iShares Core S&P Mid-Cap ETF has $96.14 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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 >>Franklin U.S. Mid Cap Multifactor Index ETF (FLQM): ETF Research Reports
Garmin Ltd. (GRMN) : Free Stock Analysis Report
W.W. Grainger, Inc. (GWW) : Free Stock Analysis Report
Fair Isaac Corporation (FICO) : Free Stock Analysis Report
iShares Core S&P Mid-Cap ETF (IJH): ETF Research Reports
Vanguard Mid-Cap ETF (VO): 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.
