Designed to provide broad exposure to the Mid Cap Blend segment of the US equity market, the Invesco S&P MidCap Quality ETF (
XMHQ Quick Quote XMHQ - Free Report) is a passively managed exchange traded fund launched on 12/01/2006.
The fund is sponsored by Invesco. It has amassed assets over $326.38 million, making it one of the average sized ETFs attempting to match the Mid Cap Blend segment of the US equity market.
Why Mid Cap Blend
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. These types of companies, then, have a good balance of stability and growth potential.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
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 0.25%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.02%.
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 32.30% of the portfolio. Consumer Discretionary and Information Technology round out the top three.
Looking at individual holdings, Molina Healthcare Inc (
MOH Quick Quote MOH - Free Report) accounts for about 4.89% of total assets, followed by Signature Bank/new York Ny ( SBNY Quick Quote SBNY - Free Report) and Williams-Sonoma Inc ( WSM Quick Quote WSM - Free Report) .
The top 10 holdings account for about 29.93% of total assets under management.
Performance and Risk
XMHQ seeks to match the performance of the S&P MIDCAP 400 QUALITY INDEX before fees and expenses. The S&P MidCap 400 Quality Index is designed to provide equal-weighted exposure to approximately 800 securities of medium-sized companies in the larger US equity market.
The ETF has lost about -2.48% so far this year and was up about 6.21% in the last one year (as of 02/17/2022). In the past 52-week period, it has traded between $71.58 and $83.73.
The ETF has a beta of 1.02 and standard deviation of 25.62% for the trailing three-year period. With about 78 holdings, it effectively diversifies company-specific risk.
Invesco S&P MidCap Quality 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, XMHQ 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 Vanguard MidCap ETF (
VO Quick Quote VO - Free Report) and the iShares Core S&P MidCap ETF ( IJH Quick Quote IJH - Free Report) track a similar index. While Vanguard MidCap ETF has $54.42 billion in assets, iShares Core S&P MidCap ETF has $65.85 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%. 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.