Should iShares Core S&P MidCap ETF (IJH) Be on Your Investing Radar?

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Launched on 05/22/2000, the iShares Core S&P MidCap ETF (IJH) 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 Blackrock. It has amassed assets over $64.62 billion, making it the largest 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. These types of companies, then, have a good balance of stability and growth potential.

Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.

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 0.05%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 1.58%.

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 19.80% of the portfolio. Financials and Consumer Discretionary round out the top three.

Looking at individual holdings, Carlisle Companies Inc (CSL) accounts for about 0.73% of total assets, followed by Targa Resources Corp (TRGP) and Steel Dynamics Inc (STLD).

The top 10 holdings account for about 3.85% of total assets under management.

Performance and Risk

IJH seeks to match the performance of the S&P MidCap 400 Index before fees and expenses. The S&P MidCap 400 Index measures the performance of the mid-capitalization sector of the U.S. equity market.

The ETF has lost about -10.89% so far this year and is down about -12.28% in the last one year (as of 11/15/2022). In the past 52-week period, it has traded between $219.07 and $290.54.

The ETF has a beta of 1.12 and standard deviation of 29.70% for the trailing three-year period, making it a medium risk choice in the space. With about 413 holdings, it effectively diversifies company-specific risk.

Alternatives

IShares Core S&P 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, IJH 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 iShares Russell MidCap ETF (IWR) and the Vanguard MidCap ETF (VO) track a similar index. While iShares Russell MidCap ETF has $28.01 billion in assets, Vanguard MidCap ETF has $50.76 billion. IWR has an expense ratio of 0.18% and VO charges 0.04%.

Bottom-Line

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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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iShares Core S&P MidCap ETF (IJH): ETF Research Reports
 
Steel Dynamics, Inc. (STLD) : Free Stock Analysis Report
 
Carlisle Companies Incorporated (CSL) : Free Stock Analysis Report
 
Targa Resources, Inc. (TRGP) : Free Stock Analysis Report
 
Vanguard MidCap ETF (VO): ETF Research Reports
 
iShares Russell MidCap ETF (IWR): ETF Research Reports
 
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