Should iShares Morningstar MidCap Value ETF (IMCV) Be on Your Investing Radar?
If you're interested in broad exposure to the Mid Cap Value segment of the US equity market, look no further than the iShares Morningstar MidCap Value ETF (IMCV), a passively managed exchange traded fund launched on 06/28/2004.
The fund is sponsored by Blackrock. It has amassed assets over $522.14 million, 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.
While 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. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.
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 0.06%, making it the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.91%.
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 15% of the portfolio. Industrials and Utilities round out the top three.
Looking at individual holdings, Centene Corp (CNC) accounts for about 1.04% of total assets, followed by Sysco Corp (SYY) and Archer Daniels Midland (ADM).
The top 10 holdings account for about 8.85% of total assets under management.
Performance and Risk
IMCV seeks to match the performance of the MORNINGSTAR US MID CAP BROAD VALUE INDEX before fees and expenses. The Morningstar US Mid Cap Broad Value Index comprises of mid-capitalization U.S. equities that exhibit value characteristics.
The ETF has lost about -0.29% so far this year and it's up approximately 9.99% in the last one year (as of 04/25/2022). In the past 52-week period, it has traded between $61.19 and $70.61.
The ETF has a beta of 1.13 and standard deviation of 27.31% for the trailing three-year period. With about 389 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Morningstar MidCap 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, IMCV 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 iShares Russell MidCap Value ETF (IWS) and the Vanguard MidCap Value ETF (VOE) track a similar index. While iShares Russell MidCap Value ETF has $14.46 billion in assets, Vanguard MidCap Value ETF has $16.72 billion. IWS has an expense ratio of 0.23% and VOE charges 0.07%.
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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iShares Morningstar MidCap Value ETF (IMCV): ETF Research Reports
Archer Daniels Midland Company (ADM) : Free Stock Analysis Report
Sysco Corporation (SYY) : Free Stock Analysis Report
Centene Corporation (CNC) : Free Stock Analysis Report
Vanguard MidCap Value ETF (VOE): ETF Research Reports
iShares Russell MidCap Value ETF (IWS): ETF Research Reports
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