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Is WisdomTree U.S. MidCap ETF (EZM) a Strong ETF Right Now?
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Launched on 02/23/2007, the WisdomTree U.S. MidCap ETF (EZM - Free Report) is a smart beta exchange traded fund offering 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.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
EZM is managed by Wisdomtree, and this fund has amassed over $731.73 million, which makes it one of the average sized ETFs in the Style Box - Mid Cap Value. This particular fund seeks to match the performance of the WisdomTree U.S. MidCap Earnings Index before fees and expenses.
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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for this ETF are 0.38%, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.57%.
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 21% of the portfolio --while Consumer Discretionary and Industrials round out the top three.
Looking at individual holdings, Builders Firstsource Inc (BLDR - Free Report) accounts for about 1.06% of total assets, followed by Cleveland-Cliffs Inc (CLF - Free Report) and Ally Financial Inc (ALLY - Free Report) .
EZM's top 10 holdings account for about 7.35% of its total assets under management.
Performance and Risk
The ETF has lost about -12.75% so far this year and is down about -12.16% in the last one year (as of 01/02/2023). In the past 52-week period, it has traded between $43.88 and $57.18.
The fund has a beta of 1.20 and standard deviation of 31.66% for the trailing three-year period, which makes EZM a medium risk choice in this particular space. With about 586 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. MidCap ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
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 $13.04 billion in assets, Vanguard MidCap Value ETF has $15.97 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?
Launched on 02/23/2007, the WisdomTree U.S. MidCap ETF (EZM - Free Report) is a smart beta exchange traded fund offering 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.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
EZM is managed by Wisdomtree, and this fund has amassed over $731.73 million, which makes it one of the average sized ETFs in the Style Box - Mid Cap Value. This particular fund seeks to match the performance of the WisdomTree U.S. MidCap Earnings Index before fees and expenses.
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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for this ETF are 0.38%, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.57%.
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 21% of the portfolio --while Consumer Discretionary and Industrials round out the top three.
Looking at individual holdings, Builders Firstsource Inc (BLDR - Free Report) accounts for about 1.06% of total assets, followed by Cleveland-Cliffs Inc (CLF - Free Report) and Ally Financial Inc (ALLY - Free Report) .
EZM's top 10 holdings account for about 7.35% of its total assets under management.
Performance and Risk
The ETF has lost about -12.75% so far this year and is down about -12.16% in the last one year (as of 01/02/2023). In the past 52-week period, it has traded between $43.88 and $57.18.
The fund has a beta of 1.20 and standard deviation of 31.66% for the trailing three-year period, which makes EZM a medium risk choice in this particular space. With about 586 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. MidCap ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
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 $13.04 billion in assets, Vanguard MidCap Value ETF has $15.97 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.