Looking for broad exposure to the Mid Cap Value segment of the US equity market? You should consider the iShares S&P Mid-Cap 400 Value ETF (IJJ), a passively managed exchange traded fund launched on 07/24/2000.
The fund is sponsored by Blackrock. It has amassed assets over $7.86 billion, making it one of the larger ETFs attempting to match the Mid Cap Value segment of the US equity market.
Why Mid Cap Value
With market capitalization between $2 billion and $10 billion, mid cap companies usually contain higher growth prospects than large cap companies, and are considered less risky than their small cap counterparts. Thus, companies that fall under this category provide a stable and growth-heavy investment.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. While 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.18%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.81%.
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 Financials sector--about 22.20% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Illumina Inc (ILMN) accounts for about 1.48% of total assets, followed by Expand Energy Corp (EXE) and Us Foods Holding Corp (USFD).
The top 10 holdings account for about 1.48% of total assets under management.
Performance and Risk
IJJ seeks to match the performance of the S&P MidCap 400 Value Index before fees and expenses. The S&P MidCap 400 Value Index measures the performance of the mid-capitalization value sector of the U.S. equity market. It is a subset of the S&P MidCap 400 and consists of those stocks in the S&P MidCap 400 exhibiting the strongest value characteristics.
The ETF has added roughly 0% so far this year and was up about 11.56% in the last one year (as of 01/01/2025). In the past 52-week period, it has traded between $109.27 and $135.52.
The ETF has a beta of 1.15 and standard deviation of 19.72% for the trailing three-year period, making it a medium risk choice in the space. With about 301 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares S&P Mid-Cap 400 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, IJJ 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 $13.50 billion in assets, Vanguard Mid-Cap Value ETF has $17.32 billion. IWS has an expense ratio of 0.23% and VOE charges 0.07%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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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Free: See Our Top Stock And 4 Runners UpiShares S&P Mid-Cap 400 Value ETF (IJJ): ETF Research Reports
Illumina, Inc. (ILMN) : Free Stock Analysis Report
Vanguard Mid-Cap Value ETF (VOE): ETF Research Reports
US Foods Holding Corp. (USFD) : Free Stock Analysis Report
iShares Russell Mid-Cap Value ETF (IWS): ETF Research Reports
Expand Energy Corporation (EXE) : Free Stock Analysis Report
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