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Should iShares Russell MidCap ETF (IWR) Be on Your Investing Radar?

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If you're interested in broad exposure to the Mid Cap Blend segment of the US equity market, look no further than the iShares Russell MidCap ETF (IWR - Free Report) , a passively managed exchange traded fund launched on 07/17/2001.

The fund is sponsored by Blackrock. It has amassed assets over $28.71 billion, making it one of the largest ETFs attempting to match the Mid Cap Blend segment of the US equity market.

Why Mid Cap Blend

Compared to large and small cap companies, mid cap businesses tend to have higher growth prospects and are less volatile, respectively, with market capitalization between $2 billion and $10 billion. Thus, companies that fall under this category provide a stable and growth-heavy investment.

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.


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 1.50%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Industrials sector--about 15.60% of the portfolio. Information Technology and Financials round out the top three.

Looking at individual holdings, Oreilly Automotive Inc (ORLY - Free Report) accounts for about 0.56% of total assets, followed by Synopsys Inc (SNPS - Free Report) and Phillips 66 (PSX - Free Report) .

The top 10 holdings account for about 1.59% of total assets under management.

Performance and Risk

IWR seeks to match the performance of the Russell MidCap Index before fees and expenses. The Russell Midcap Index measures the performance of the mid-capitalization sector of the U.S. equity market.

The ETF has gained about 5.93% so far this year and is down about -4.61% in the last one year (as of 01/25/2023). In the past 52-week period, it has traded between $62.09 and $79.88.

The ETF has a beta of 1.08 and standard deviation of 27.64% for the trailing three-year period, making it a medium risk choice in the space. With about 822 holdings, it effectively diversifies company-specific risk.


IShares Russell MidCap 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, IWR 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 $52.71 billion in assets, iShares Core S&P MidCap ETF has $67.73 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.


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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