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Should iShares Morningstar Mid-Cap Growth ETF (JKH) Be on Your Investing Radar?

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Looking for broad exposure to the Mid Cap Growth segment of the US equity market? You should consider the iShares Morningstar Mid-Cap Growth ETF (JKH), a passively managed exchange traded fund launched on 06/28/2004.

The fund is sponsored by Blackrock. It has amassed assets over $585.34 M, making it one of the average sized ETFs attempting to match the Mid Cap Growth segment of the US equity market.

Why Mid Cap Growth

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, companies that fall under this category provide a stable and growth-heavy investment.

While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Also, growth stocks are a type of equity that carries more risk compared to others. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.

Costs

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.

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 0.24%.

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 Information Technology sector--about 31.50% of the portfolio. Healthcare and Industrials round out the top three.

Looking at individual holdings, Global Payments Inc (GPN) accounts for about 2.32% of total assets, followed by Ihs Markit Ltd (INFO) and Hilton Worldwide Holdings Inc (HLT).

The top 10 holdings account for about 13.37% of total assets under management.

Performance and Risk

JKH seeks to match the performance of the Morningstar Mid Growth Index before fees and expenses. The Morningstar Mid Growth Index measures the performance of stocks issued by mid-capitalization companies. The Morningstar index methodology defines mid-capitalization stocks as those stocks that form the 20% of market capitalization between the 70th and 90th percentile of the market capitalization of the stocks eligible to be included in the Morningstar US Market Index.

The ETF has added roughly 25.67% so far this year and is up about 10.60% in the last one year (as of 10/17/2019). In the past 52-week period, it has traded between $180.97 and $259.55.

The ETF has a beta of 1.07 and standard deviation of 14.77% for the trailing three-year period, making it a medium risk choice in the space. With about 196 holdings, it effectively diversifies company-specific risk.

Alternatives

IShares Morningstar Mid-Cap Growth ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, JKH is an outstanding option for investors seeking exposure to the Style Box - Mid Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.

The iShares S&P Mid-Cap 400 Growth ETF (IJK) and the iShares Russell Mid-Cap Growth ETF (IWP) track a similar index. While iShares S&P Mid-Cap 400 Growth ETF has $7.23 B in assets, iShares Russell Mid-Cap Growth ETF has $10.77 B. IJK has an expense ratio of 0.24% and IWP charges 0.24%.

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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iShares Morningstar Mid-Cap Growth ETF (JKH): ETF Research Reports
 
IHS Markit Ltd. (INFO) : Free Stock Analysis Report
 
iShares Russell Mid-Cap Growth ETF (IWP): ETF Research Reports
 
Hilton Worldwide Holdings Inc. (HLT) : Free Stock Analysis Report
 
Global Payments Inc. (GPN) : Free Stock Analysis Report
 
iShares S&P Mid-Cap 400 Growth ETF (IJK): ETF Research Reports
 
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Zacks Investment Research