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Should iShares Core S&P MidCap ETF (IJH) Be on Your Investing Radar?

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The iShares Core S&P MidCap ETF (IJH - Free Report) was launched on 05/22/2000, and is a passively managed exchange traded fund designed to offer broad exposure to the Mid Cap Blend segment of the US equity market.

The fund is sponsored by Blackrock. It has amassed assets over $63.46 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.

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 0.05%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 1.29%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Industrials sector--about 19.10% of the portfolio. Financials and Consumer Discretionary round out the top three.

Looking at individual holdings, Signature Bank (SBNY - Free Report) accounts for about 0.76% of total assets, followed by Solaredge Technologies Inc (SEDG - Free Report) and Molina Healthcare Inc (MOH - Free Report) .

The top 10 holdings account for about 4.72% 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 lost about -8.69% so far this year and it's up approximately 3.20% in the last one year (as of 03/10/2022). In the past 52-week period, it has traded between $251.21 and $290.54.

The ETF has a beta of 1.15 and standard deviation of 27.69% for the trailing three-year period, making it a medium risk choice in the space. With about 409 holdings, it effectively diversifies company-specific risk.

Alternatives

IShares Core S&P MidCap 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 sufficient 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 MidCap ETF (IWR - Free Report) and the Vanguard MidCap ETF (VO - Free Report) track a similar index. While iShares Russell MidCap ETF has $28.51 billion in assets, Vanguard MidCap ETF has $51.84 billion. IWR has an expense ratio of 0.19% and VO charges 0.04%.

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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