If you're interested in broad exposure to the Mid Cap Value segment of the US equity market, look no further than the Invesco S&P MidCap Value with Momentum ETF (XMVM Quick QuoteXMVM - Free Report) , a passively managed exchange traded fund launched on 03/03/2005.

The fund is sponsored by Invesco. It has amassed assets over $280.53 million, making it one of the smaller ETFs attempting to match the Mid Cap Value segment of the US equity market.

Why Mid Cap Value

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.

Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. While value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.

Costs

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Annual operating expenses for this ETF are 0.39%, making it one of the more expensive products in the space.

It has a 12-month trailing dividend yield of 1.26%.

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.

This ETF has heaviest allocation to the Financials sector--about 37.10% of the portfolio. Consumer Discretionary and Energy round out the top three.

Looking at individual holdings, Lithia Motors Inc (LAD Quick QuoteLAD - Free Report) accounts for about 2.72% of total assets, followed by Avnet Inc (AVT Quick QuoteAVT - Free Report) and Arrow Electronics Inc (ARW Quick QuoteARW - Free Report) .

The top 10 holdings account for about 19.82% of total assets under management.

Performance and Risk

XMVM seeks to match the performance of the S&P MIDCAP 400 HIGH MOMENTUM VALUE INDEX before fees and expenses. The S&P MidCap 400 High Momentum Value Index is composed of securities with strong value characteristics selected from the Russell Midcap Index.

The ETF has added about 20.98% so far this year and was up about 35.45% in the last one year (as of 11/07/2024). In the past 52-week period, it has traded between $43.85 and $60.33.

The ETF has a beta of 1.16 and standard deviation of 22.53% for the trailing three-year period. With about 82 holdings, it effectively diversifies company-specific risk.

Alternatives

Invesco S&P MidCap Value with Momentum 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, XMVM is a reasonable option for those seeking exposure to the Style Box - Mid Cap Value area of the market. Investors might also want to consider some other ETF options in the space.

The iShares Russell Mid-Cap Value ETF (IWS Quick QuoteIWS - Free Report) and the Vanguard Mid-Cap Value ETF (VOE Quick QuoteVOE - Free Report) track a similar index. While iShares Russell Mid-Cap Value ETF has $13.93 billion in assets, Vanguard Mid-Cap Value ETF has $18.40 billion. IWS has an expense ratio of 0.23% and VOE charges 0.07%.

Bottom-Line

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also 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.