The Franklin U.S. Mid Cap Multifactor Index ETF (FLQM Quick QuoteFLQM - Free Report) was launched on 04/26/2017, and is a passively managed exchange traded fund designed to offer broad exposure to the Mid Cap Blend segment of the US equity market.

The fund is sponsored by Franklin Templeton Investments. It has amassed assets over $393.76 million, making it one of the average sized ETFs attempting to match the Mid Cap Blend segment of the US equity market.

Why Mid Cap Blend

Mid cap companies have market capitalization between $2 billion and $10 billion. They usually have higher growth prospects than large cap companies and are less volatile than small cap companies. Thus they have a nice balance of growth potential and stability.

Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.

Costs

When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

Annual operating expenses for this ETF are 0.30%, putting it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 1.27%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Industrials sector--about 22.50% of the portfolio. Consumer Discretionary and Information Technology round out the top three.

Looking at individual holdings, Old Dominion Freight Line (ODFL Quick QuoteODFL - Free Report) accounts for about 1.27% of total assets, followed by Nucor Corp (NUE Quick QuoteNUE - Free Report) and Trane Technologies Plc (TT Quick QuoteTT - Free Report) .

The top 10 holdings account for about 11.11% of total assets under management.

Performance and Risk

FLQM seeks to match the performance of the LibertyQ U.S. Mid Cap Equity Index before fees and expenses. The LibertyQ U.S. Mid Cap Equity Index includes U.S. mid-capitalization companies that have favorable exposure to four investment style factors - quality, value, momentum and low volatility.

The ETF has added about 17.10% so far this year and was up about 16.65% in the last one year (as of 12/26/2023). In the past 52-week period, it has traded between $40.75 and $48.02.

The ETF has a beta of 1.02 and standard deviation of 17.34% for the trailing three-year period. With about 204 holdings, it effectively diversifies company-specific risk.

Alternatives

Franklin U.S. Mid Cap Multifactor Index 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, FLQM is a sufficient 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 Mid-Cap ETF (VO Quick QuoteVO - Free Report) and the iShares Core S&P Mid-Cap ETF (IJH Quick QuoteIJH - Free Report) track a similar index. While Vanguard Mid-Cap ETF has $58.65 billion in assets, iShares Core S&P Mid-Cap ETF has $76.49 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.

Bottom-Line

While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.

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.