The iShares S&P MidCap 400 Value ETF (
IJJ Quick Quote IJJ - Free Report) was launched on 07/24/2000, and is a passively managed exchange traded fund designed to offer broad exposure to the Mid Cap Value segment of the US equity market.
The fund is sponsored by Blackrock. It has amassed assets over $7.70 billion, making it one of the larger ETFs attempting to match the Mid Cap Value segment of the US equity market.
Why Mid Cap Value
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. Thus they have a nice balance of growth potential and stability.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.
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.
Annual operating expenses for this ETF are 0.18%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.80%.
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 Industrials sector--about 18.70% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, First Horizon Corp (
FHN Quick Quote FHN - Free Report) accounts for about 1.14% of total assets, followed by Alleghany Corp and Reliance Steel & Aluminum ( RS Quick Quote RS - Free Report) .
The top 10 holdings account for about 9.39% of total assets under management.
Performance and Risk
IJJ seeks to match the performance of the S&P MidCap 400 Value Index before fees and expenses. The S&P MidCap 400 Value Index measures the performance of the mid-capitalization value sector of the U.S. equity market. It is a subset of the S&P MidCap 400 and consists of those stocks in the S&P MidCap 400 exhibiting the strongest value characteristics.
The ETF has lost about -7.35% so far this year and is down about -0.85% in the last one year (as of 08/04/2022). In the past 52-week period, it has traded between $91.51 and $113.35.
The ETF has a beta of 1.17 and standard deviation of 30.73% for the trailing three-year period, making it a medium risk choice in the space. With about 301 holdings, it effectively diversifies company-specific risk.
IShares S&P MidCap 400 Value 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, IJJ is a great option for investors seeking exposure to the Style Box - Mid Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell MidCap Value ETF (
IWS Quick Quote IWS - Free Report) and the Vanguard MidCap Value ETF ( VOE Quick Quote VOE - Free Report) track a similar index. While iShares Russell MidCap Value ETF has $13.39 billion in assets, Vanguard MidCap Value ETF has $15.87 billion. IWS has an expense ratio of 0.23% and VOE charges 0.07%. 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.