Designed to provide broad exposure to the Mid Cap Growth segment of the US equity market, the iShares Morningstar MidCap Growth ETF is a passively managed exchange traded fund launched on 06/28/2004.
The fund is sponsored by Blackrock. It has amassed assets over $1.66 billion, 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
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.
Qualities of growth stocks include faster growth rates compared to the broader market, as well as higher valuations and higher than average sales and earnings growth rates. Also, growth stocks are a type of equity that carries more risk compared to others. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.
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 0.09%.
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 Information Technology sector--about 39.40% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, Roku Inc Class A (
ROKU Quick Quote ROKU - Free Report) accounts for about 1.67% of total assets, followed by Crowdstrike Holdings Inc Class A ( CRWD Quick Quote CRWD - Free Report) and Match Group Inc ( MTCH Quick Quote MTCH - Free Report) .
The top 10 holdings account for about 14.3% 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 gained about 8.74% so far this year and is up about 49.67% in the last one year (as of 02/10/2021). In the past 52-week period, it has traded between $188.46 and $409.79.
The ETF has a beta of 1.08 and standard deviation of 24.58% for the trailing three-year period, making it a medium risk choice in the space. With about 171 holdings, it effectively diversifies company-specific risk.
IShares Morningstar MidCap 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 a great 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 Vanguard MidCap Growth ETF (
VOT Quick Quote VOT - Free Report) and the iShares Russell MidCap Growth ETF ( IWP Quick Quote IWP - Free Report) track a similar index. While Vanguard MidCap Growth ETF has $10.81 billion in assets, iShares Russell MidCap Growth ETF has $15.96 billion. VOT has an expense ratio of 0.07% and IWP charges 0.24%. 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.