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Should Invesco S&P MidCap Quality ETF (XMHQ) Be on Your Investing Radar?
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Launched on 12/01/2006, the Invesco S&P MidCap Quality ETF (XMHQ - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Mid Cap Blend segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $4.28 billion, making it one of the larger 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 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.25%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.60%.
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 27.90% of the portfolio. Information Technology and Consumer Discretionary round out the top three.
Looking at individual holdings, Manhattan Associates Inc (MANH - Free Report) accounts for about 3.76% of total assets, followed by Deckers Outdoor Corp (DECK - Free Report) and Super Micro Computer Inc (SMCI - Free Report) .
The top 10 holdings account for about 26.12% of total assets under management.
Performance and Risk
XMHQ seeks to match the performance of the S&P MIDCAP 400 QUALITY INDEX before fees and expenses. The S&P MidCap 400 Quality Index is designed to provide equal-weighted exposure to approximately 800 securities of medium-sized companies in the larger US equity market.
The ETF has added roughly 21.94% so far this year and is up about 55.72% in the last one year (as of 03/14/2024). In the past 52-week period, it has traded between $69.51 and $108.17.
The ETF has a beta of 1.05 and standard deviation of 21.59% for the trailing three-year period. With about 82 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P MidCap Quality 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, XMHQ 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 Mid-Cap ETF (VO - Free Report) and the iShares Core S&P Mid-Cap ETF (IJH - Free Report) track a similar index. While Vanguard Mid-Cap ETF has $62.88 billion in assets, iShares Core S&P Mid-Cap ETF has $82.71 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.
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Should Invesco S&P MidCap Quality ETF (XMHQ) Be on Your Investing Radar?
Launched on 12/01/2006, the Invesco S&P MidCap Quality ETF (XMHQ - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Mid Cap Blend segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $4.28 billion, making it one of the larger 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 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.25%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.60%.
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 27.90% of the portfolio. Information Technology and Consumer Discretionary round out the top three.
Looking at individual holdings, Manhattan Associates Inc (MANH - Free Report) accounts for about 3.76% of total assets, followed by Deckers Outdoor Corp (DECK - Free Report) and Super Micro Computer Inc (SMCI - Free Report) .
The top 10 holdings account for about 26.12% of total assets under management.
Performance and Risk
XMHQ seeks to match the performance of the S&P MIDCAP 400 QUALITY INDEX before fees and expenses. The S&P MidCap 400 Quality Index is designed to provide equal-weighted exposure to approximately 800 securities of medium-sized companies in the larger US equity market.
The ETF has added roughly 21.94% so far this year and is up about 55.72% in the last one year (as of 03/14/2024). In the past 52-week period, it has traded between $69.51 and $108.17.
The ETF has a beta of 1.05 and standard deviation of 21.59% for the trailing three-year period. With about 82 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P MidCap Quality 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, XMHQ 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 Mid-Cap ETF (VO - Free Report) and the iShares Core S&P Mid-Cap ETF (IJH - Free Report) track a similar index. While Vanguard Mid-Cap ETF has $62.88 billion in assets, iShares Core S&P Mid-Cap ETF has $82.71 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.