Looking for broad exposure to the Mid Cap Value segment of the US equity market? You should consider the iShares Morningstar Mid-Cap Value ETF (JKI), a passively managed exchange traded fund launched on 06/28/2004.
The fund is sponsored by Blackrock. It has amassed assets over $459.43 M, making it one of the average sized ETFs attempting to match the Mid Cap Value segment of the US equity market.
Why Mid Cap Value
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.
Value stocks have lower than average price-to-earnings and price-to-book ratios. They also have 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.
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining 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 2.32%.
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 21.40% of the portfolio. Utilities and Consumer Discretionary round out the top three.
Looking at individual holdings, Welltower Inc (WELL) accounts for about 1.71% of total assets, followed by Wec Energy Group Inc (WEC) and Paccar Inc (PCAR).
The top 10 holdings account for about 13.32% of total assets under management.
Performance and Risk
JKI seeks to match the performance of the Morningstar Mid Value Index before fees and expenses. The Morningstar Mid Value Index measures the performance of stocks issued by mid-capitalization companies.
The ETF has gained about 12.20% so far this year and was up about 2.36% in the last one year (as of 02/14/2019). In the past 52-week period, it has traded between $132.21 and $166.11.
The ETF has a beta of 0.97 and standard deviation of 12.95% for the trailing three-year period, making it a medium risk choice in the space. With about 184 holdings, it effectively diversifies company-specific risk.
IShares Morningstar Mid-Cap Value ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, JKI is a great option for investors seeking exposure to the Style Box - Mid Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard Mid-Cap Value ETF (VOE) and the iShares Russell Mid-Cap Value ETF (IWS) track a similar index. While Vanguard Mid-Cap Value ETF has $8.90 B in assets, iShares Russell Mid-Cap Value ETF has $11.15 B. VOE has an expense ratio of 0.07% and IWS charges 0.25%.
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 Morningstar Mid-Cap Value ETF (JKI): ETF Research Reports
WEC Energy Group, Inc. (WEC) : Free Stock Analysis Report
PACCAR Inc. (PCAR) : Free Stock Analysis Report
iShares Russell Mid-Cap Value ETF (IWS): ETF Research Reports
Vanguard Mid-Cap Value ETF (VOE): ETF Research Reports
Welltower Inc. (WELL) : Free Stock Analysis Report
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