Designed to provide broad exposure to the Mid Cap Blend segment of the US equity market, the iShares Russell MidCap ETF (IWR) is a passively managed exchange traded fund launched on 07/17/2001.
The fund is sponsored by Blackrock. It has amassed assets over $31.68 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
Mid cap companies, with market capitalization in the range of $2 billion and $10 billion, offer investors many things that small and large companies don’t, including less risk and higher growth opportunities. These types of companies, then, have a good balance of stability and growth potential.
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 0.19%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.99%.
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 Information Technology sector–about 19.60% of the portfolio. Industrials and Financials round out the top three.
Looking at individual holdings, Idexx Laboratories Inc (IDXX) accounts for about 0.49% of total assets, followed by Twitter Inc (TWTR) and Docusign Inc (DOCU).
The top 10 holdings account for about 4.31% 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 added about 26.91% so far this year and it’s up approximately 36.28% in the last one year (as of 11/10/2021). In the past 52-week period, it has traded between $62.65 and $84.99.
The ETF has a beta of 1.10 and standard deviation of 24.64% for the trailing three-year period, making it a medium risk choice in the space. With about 833 holdings, it effectively diversifies company-specific risk.
Alternatives
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 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 MidCap ETF (VO) and the iShares Core S&P MidCap ETF (IJH) track a similar index. While Vanguard MidCap ETF has $56.03 billion in assets, iShares Core S&P MidCap ETF has $68.95 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.
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
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