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Should Invesco S&P MidCap Quality ETF (XMHQ) Be on Your Investing Radar?
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Designed to provide broad exposure to the Mid Cap Blend segment of the US equity market, the Invesco S&P MidCap Quality ETF (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 $343.83 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
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 they have a nice balance of growth potential and stability.
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.
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 0.25%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.30%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 31.20% of the portfolio. Consumer Discretionary and Industrials round out the top three.
Looking at individual holdings, Williams-Sonoma Inc (WSM - Free Report) accounts for about 3.65% of total assets, followed by East West Bancorp Inc (EWBC - Free Report) and Cognex Corp (CGNX - Free Report) .
The top 10 holdings account for about 23.88% 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 -8.91% so far this year and is down about -6.13% in the last one year (as of 04/19/2022). In the past 52-week period, it has traded between $70.84 and $83.73.
The ETF has a beta of 1 and standard deviation of 26.33% for the trailing three-year period. With about 79 holdings, it effectively diversifies company-specific risk.
Alternatives
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 good 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 - Free Report) and the iShares Core S&P MidCap ETF (IJH - Free Report) track a similar index. While Vanguard MidCap ETF has $53.28 billion in assets, iShares Core S&P MidCap ETF has $63.97 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.
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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Should Invesco S&P MidCap Quality ETF (XMHQ) Be on Your Investing Radar?
Designed to provide broad exposure to the Mid Cap Blend segment of the US equity market, the Invesco S&P MidCap Quality ETF (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 $343.83 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
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 they have a nice balance of growth potential and stability.
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.
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 0.25%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.30%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 31.20% of the portfolio. Consumer Discretionary and Industrials round out the top three.
Looking at individual holdings, Williams-Sonoma Inc (WSM - Free Report) accounts for about 3.65% of total assets, followed by East West Bancorp Inc (EWBC - Free Report) and Cognex Corp (CGNX - Free Report) .
The top 10 holdings account for about 23.88% 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 -8.91% so far this year and is down about -6.13% in the last one year (as of 04/19/2022). In the past 52-week period, it has traded between $70.84 and $83.73.
The ETF has a beta of 1 and standard deviation of 26.33% for the trailing three-year period. With about 79 holdings, it effectively diversifies company-specific risk.
Alternatives
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 good 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 - Free Report) and the iShares Core S&P MidCap ETF (IJH - Free Report) track a similar index. While Vanguard MidCap ETF has $53.28 billion in assets, iShares Core S&P MidCap ETF has $63.97 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.
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.