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Is Invesco S&P MidCap 400 Equal Weight ETF (EWMC) a Strong ETF Right Now?
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The Invesco S&P MidCap 400 Equal Weight ETF was launched on 12/03/2010, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Mid Cap Blend category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Invesco. EWMC has been able to amass assets over $236.37 million, making it one of the average sized ETFs in the Style Box - Mid Cap Blend. EWMC seeks to match the performance of the S&P MidCap 400 Equal Weight Index before fees and expenses.
The S&P MidCap 400 Equal Weight Index equally weights mid-cap securities in the S&P MidCap 400 Index.
Cost & Other Expenses
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 cousins, other things remaining the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.40%.
The fund has a 12-month trailing dividend yield of 1.25%.
Sector Exposure and Top Holdings
ETFs offer 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.
EWMC's heaviest allocation is in the Industrials sector, which is about 19.60% of the portfolio. Its Consumer Discretionary and Financials round out the top three.
Looking at individual holdings, Super Micro Computer Inc (SMCI - Free Report) accounts for about 0.68% of total assets, followed by Celsius Holdings Inc (CELH - Free Report) and Equitrans Midstream Corp (ETRN - Free Report) .
EWMC's top 10 holdings account for about 3.61% of its total assets under management.
Performance and Risk
So far this year, EWMC has added about 8.90%, and it's up approximately 0.70% in the last one year (as of 08/17/2023). During this past 52-week period, the fund has traded between $75.06 and $95.15.
The ETF has a beta of 1.21 and standard deviation of 21.49% for the trailing three-year period, making it a medium risk choice in the space. With about 403 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P MidCap 400 Equal Weight ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Mid-Cap ETF (VO - Free Report) tracks CRSP US Mid Cap Index and the iShares Core S&P Mid-Cap ETF (IJH - Free Report) tracks S&P MidCap 400 Index. Vanguard Mid-Cap ETF has $53.71 billion in assets, iShares Core S&P Mid-Cap ETF has $72.88 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.
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 Blend.
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 Invesco S&P MidCap 400 Equal Weight ETF (EWMC) a Strong ETF Right Now?
The Invesco S&P MidCap 400 Equal Weight ETF was launched on 12/03/2010, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Mid Cap Blend category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Invesco. EWMC has been able to amass assets over $236.37 million, making it one of the average sized ETFs in the Style Box - Mid Cap Blend. EWMC seeks to match the performance of the S&P MidCap 400 Equal Weight Index before fees and expenses.
The S&P MidCap 400 Equal Weight Index equally weights mid-cap securities in the S&P MidCap 400 Index.
Cost & Other Expenses
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 cousins, other things remaining the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.40%.
The fund has a 12-month trailing dividend yield of 1.25%.
Sector Exposure and Top Holdings
ETFs offer 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.
EWMC's heaviest allocation is in the Industrials sector, which is about 19.60% of the portfolio. Its Consumer Discretionary and Financials round out the top three.
Looking at individual holdings, Super Micro Computer Inc (SMCI - Free Report) accounts for about 0.68% of total assets, followed by Celsius Holdings Inc (CELH - Free Report) and Equitrans Midstream Corp (ETRN - Free Report) .
EWMC's top 10 holdings account for about 3.61% of its total assets under management.
Performance and Risk
So far this year, EWMC has added about 8.90%, and it's up approximately 0.70% in the last one year (as of 08/17/2023). During this past 52-week period, the fund has traded between $75.06 and $95.15.
The ETF has a beta of 1.21 and standard deviation of 21.49% for the trailing three-year period, making it a medium risk choice in the space. With about 403 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P MidCap 400 Equal Weight ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Mid-Cap ETF (VO - Free Report) tracks CRSP US Mid Cap Index and the iShares Core S&P Mid-Cap ETF (IJH - Free Report) tracks S&P MidCap 400 Index. Vanguard Mid-Cap ETF has $53.71 billion in assets, iShares Core S&P Mid-Cap ETF has $72.88 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.
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 Blend.
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.