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Is WisdomTree U.S. MidCap ETF (EZM) a Strong ETF Right Now?
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A smart beta exchange traded fund, the WisdomTree U.S. MidCap ETF (EZM - Free Report) debuted on 02/23/2007, and offers broad exposure to the Style Box - Mid Cap Value category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by Wisdomtree. EZM has been able to amass assets over $706.86 million, making it one of the average sized ETFs in the Style Box - Mid Cap Value. This particular fund, before fees and expenses, seeks to match the performance of the WisdomTree U.S. MidCap Earnings Index.
The WisdomTree U.S. MidCap Index is a fundamentally weighted index that measures the performance of earnings-generating companies within the mid-capitalization segment of the U.S. Stock Market.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.38%.
The fund has a 12-month trailing dividend yield of 1.60%.
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.
For EZM, it has heaviest allocation in the Financials sector --about 20.40% of the portfolio --while Consumer Discretionary and Industrials round out the top three.
Taking into account individual holdings, Cleveland-Cliffs Inc (CLF - Free Report) accounts for about 1.13% of the fund's total assets, followed by Organon & Co (OGN - Free Report) and Ovintiv Inc (OVV - Free Report) .
Its top 10 holdings account for approximately 7.95% of EZM's total assets under management.
Performance and Risk
Year-to-date, the WisdomTree U.S. MidCap ETF has lost about -15.32% so far, and is down about -8.84% over the last 12 months (as of 06/28/2022). EZM has traded between $45.15 and $57.18 in this past 52-week period.
The fund has a beta of 1.22 and standard deviation of 30.75% for the trailing three-year period, which makes EZM a medium risk choice in this particular space. With about 580 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. MidCap ETF is an excellent option for investors seeking to outperform the Style Box - Mid Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Russell MidCap Value ETF (IWS - Free Report) tracks Russell MidCap Value Index and the Vanguard MidCap Value ETF (VOE - Free Report) tracks CRSP U.S. Mid Cap Value Index. IShares Russell MidCap Value ETF has $13.57 billion in assets, Vanguard MidCap Value ETF has $15.17 billion. IWS has an expense ratio of 0.23% and VOE charges 0.07%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Mid Cap Value.
Bottom Line
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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Is WisdomTree U.S. MidCap ETF (EZM) a Strong ETF Right Now?
A smart beta exchange traded fund, the WisdomTree U.S. MidCap ETF (EZM - Free Report) debuted on 02/23/2007, and offers broad exposure to the Style Box - Mid Cap Value category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by Wisdomtree. EZM has been able to amass assets over $706.86 million, making it one of the average sized ETFs in the Style Box - Mid Cap Value. This particular fund, before fees and expenses, seeks to match the performance of the WisdomTree U.S. MidCap Earnings Index.
The WisdomTree U.S. MidCap Index is a fundamentally weighted index that measures the performance of earnings-generating companies within the mid-capitalization segment of the U.S. Stock Market.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.38%.
The fund has a 12-month trailing dividend yield of 1.60%.
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.
For EZM, it has heaviest allocation in the Financials sector --about 20.40% of the portfolio --while Consumer Discretionary and Industrials round out the top three.
Taking into account individual holdings, Cleveland-Cliffs Inc (CLF - Free Report) accounts for about 1.13% of the fund's total assets, followed by Organon & Co (OGN - Free Report) and Ovintiv Inc (OVV - Free Report) .
Its top 10 holdings account for approximately 7.95% of EZM's total assets under management.
Performance and Risk
Year-to-date, the WisdomTree U.S. MidCap ETF has lost about -15.32% so far, and is down about -8.84% over the last 12 months (as of 06/28/2022). EZM has traded between $45.15 and $57.18 in this past 52-week period.
The fund has a beta of 1.22 and standard deviation of 30.75% for the trailing three-year period, which makes EZM a medium risk choice in this particular space. With about 580 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. MidCap ETF is an excellent option for investors seeking to outperform the Style Box - Mid Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Russell MidCap Value ETF (IWS - Free Report) tracks Russell MidCap Value Index and the Vanguard MidCap Value ETF (VOE - Free Report) tracks CRSP U.S. Mid Cap Value Index. IShares Russell MidCap Value ETF has $13.57 billion in assets, Vanguard MidCap Value ETF has $15.17 billion. IWS has an expense ratio of 0.23% and VOE charges 0.07%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Mid Cap Value.
Bottom Line
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.