If you're interested in broad exposure to the Mid Cap Value segment of the US equity market, look no further than the iShares Morningstar Mid-Cap Value ETF (IMCV), a passively managed exchange traded fund launched on 06/28/2004.
The fund is sponsored by Blackrock. It has amassed assets over $677.03 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. These types of companies, then, have a good balance of stability and growth potential.
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. Value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.
Costs
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.
Annual operating expenses for this ETF are 0.06%, making it the least expensive products in the space.
It has a 12-month trailing dividend yield of 2.30%.
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 Financials sector--about 19.10% of the portfolio. Energy and Utilities round out the top three.
Looking at individual holdings, Capital One Financial Corp (COF) accounts for about 1.28% of total assets, followed by Williams Inc (WMB) and Oneok Inc (OKE).
The top 10 holdings account for about 10.96% of total assets under management.
Performance and Risk
IMCV seeks to match the performance of the MORNINGSTAR US MID CAP BROAD VALUE INDEX before fees and expenses. The Morningstar US Mid Cap Broad Value Index comprises of mid-capitalization U.S. equities that exhibit value characteristics.
The ETF has added roughly 2.90% so far this year and was up about 16.35% in the last one year (as of 01/30/2025). In the past 52-week period, it has traded between $66.08 and $81.02.
The ETF has a beta of 1.10 and standard deviation of 17.08% for the trailing three-year period. With about 293 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Morningstar Mid-Cap Value 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, IMCV 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 $13.89 billion in assets, Vanguard Mid-Cap Value ETF has $17.77 billion. IWS has an expense ratio of 0.23% and VOE charges 0.07%.
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 >>iShares Morningstar Mid-Cap Value ETF (IMCV): ETF Research Reports
Williams Companies, Inc. (The) (WMB) : Free Stock Analysis Report
Capital One Financial Corporation (COF) : Free Stock Analysis Report
ONEOK, Inc. (OKE) : 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.
