Designed to provide broad exposure to the Mid Cap Growth segment of the US equity market, the iShares Morningstar Mid-Cap Growth ETF (JKH) is a passively managed exchange traded fund launched on 06/28/2004.
The fund is sponsored by Blackrock. It has amassed assets over $439.03 M, making it one of the smaller 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 they have a nice balance of growth potential and stability.
Qualities of growth stocks include faster growth rates compared to the broader market, as well as higher valuations and higher than average sales and earnings growth rates. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.
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 0.30%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.28%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, 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 31.20% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, Workday Inc Class A (WDAY) accounts for about 1.42% of total assets, followed by Hilton Worldwide Holdings Inc (HLT) and Square Inc Class A (SQ).
The top 10 holdings account for about 11.52% 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 return is roughly 18.93% so far this year and it's up approximately 11.38% in the last one year (as of 03/26/2019). In the past 52-week period, it has traded between $180.97 and $237.43.
The ETF has a beta of 1.13 and standard deviation of 14.14% for the trailing three-year period, making it a medium risk choice in the space. With about 201 holdings, it effectively diversifies company-specific risk.
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 excellent 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 $7.37 B in assets, iShares Russell Mid-Cap Growth ETF has $10.14 B. IJK has an expense ratio of 0.25% and IWP charges 0.25%.
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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iShares Morningstar Mid-Cap Growth ETF (JKH): ETF Research Reports
Square, Inc. (SQ) : Free Stock Analysis Report
Workday, Inc. (WDAY) : Free Stock Analysis Report
iShares Russell Mid-Cap Growth ETF (IWP): ETF Research Reports
Hilton Worldwide Holdings Inc. (HLT) : Free Stock Analysis Report
iShares S&P Mid-Cap 400 Growth ETF (IJK): ETF Research Reports
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