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Should iShares Morningstar Mid-Cap Growth ETF (JKH) Be on Your Investing Radar?
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Launched on 06/28/2004, the iShares Morningstar Mid-Cap Growth ETF is a passively managed exchange traded fund designed to provide a broad exposure to the Mid Cap Growth segment of the US equity market.
The fund is sponsored by Blackrock. It has amassed assets over $480.23 M, making it one of the average sized ETFs attempting to match the Mid Cap Growth segment of the US equity market.
Why Mid Cap Growth
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. Thus they have a nice balance of growth potential and stability.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Also, growth stocks are a type of equity that carries more risk compared to others. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
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 0.27%.
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 Information Technology sector--about 30.90% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, Workday Inc Class A (WDAY - Free Report) accounts for about 1.46% of total assets, followed by Hilton Worldwide Holdings Inc (HLT - Free Report) and Mercadolibre Inc (MELI - Free Report) .
The top 10 holdings account for about 11.92% of total assets under management.
Performance and Risk
JKH seeks to match the performance of the Morningstar Mid Growth Index before fees and expenses. The Morningstar Mid Growth Index measures the performance of stocks issued by mid-capitalization companies. The Morningstar index methodology defines mid-capitalization stocks as those stocks that form the 20% of market capitalization between the 70th and 90th percentile of the market capitalization of the stocks eligible to be included in the Morningstar US Market Index.
The ETF has added about 20.44% so far this year and is up roughly 8.79% in the last one year (as of 05/14/2019). In the past 52-week period, it has traded between $180.97 and $244.98.
The ETF has a beta of 1.13 and standard deviation of 14.26% for the trailing three-year period, making it a medium risk choice in the space. With about 200 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Morningstar Mid-Cap Growth ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, JKH is an excellent option for investors seeking exposure to the Style Box - Mid Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares S&P Mid-Cap 400 Growth ETF (IJK - Free Report) and the iShares Russell Mid-Cap Growth ETF (IWP - Free Report) track a similar index. While iShares S&P Mid-Cap 400 Growth ETF has $7.37 B in assets, iShares Russell Mid-Cap Growth ETF has $10.37 B. IJK has an expense ratio of 0.25% and IWP charges 0.25%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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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Should iShares Morningstar Mid-Cap Growth ETF (JKH) Be on Your Investing Radar?
Launched on 06/28/2004, the iShares Morningstar Mid-Cap Growth ETF is a passively managed exchange traded fund designed to provide a broad exposure to the Mid Cap Growth segment of the US equity market.
The fund is sponsored by Blackrock. It has amassed assets over $480.23 M, making it one of the average sized ETFs attempting to match the Mid Cap Growth segment of the US equity market.
Why Mid Cap Growth
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. Thus they have a nice balance of growth potential and stability.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Also, growth stocks are a type of equity that carries more risk compared to others. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
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 0.27%.
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 Information Technology sector--about 30.90% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, Workday Inc Class A (WDAY - Free Report) accounts for about 1.46% of total assets, followed by Hilton Worldwide Holdings Inc (HLT - Free Report) and Mercadolibre Inc (MELI - Free Report) .
The top 10 holdings account for about 11.92% of total assets under management.
Performance and Risk
JKH seeks to match the performance of the Morningstar Mid Growth Index before fees and expenses. The Morningstar Mid Growth Index measures the performance of stocks issued by mid-capitalization companies. The Morningstar index methodology defines mid-capitalization stocks as those stocks that form the 20% of market capitalization between the 70th and 90th percentile of the market capitalization of the stocks eligible to be included in the Morningstar US Market Index.
The ETF has added about 20.44% so far this year and is up roughly 8.79% in the last one year (as of 05/14/2019). In the past 52-week period, it has traded between $180.97 and $244.98.
The ETF has a beta of 1.13 and standard deviation of 14.26% for the trailing three-year period, making it a medium risk choice in the space. With about 200 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Morningstar Mid-Cap Growth ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, JKH is an excellent option for investors seeking exposure to the Style Box - Mid Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares S&P Mid-Cap 400 Growth ETF (IJK - Free Report) and the iShares Russell Mid-Cap Growth ETF (IWP - Free Report) track a similar index. While iShares S&P Mid-Cap 400 Growth ETF has $7.37 B in assets, iShares Russell Mid-Cap Growth ETF has $10.37 B. IJK has an expense ratio of 0.25% and IWP charges 0.25%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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.