Should iShares S&P Mid-Cap 400 Value ETF (IJJ) Be on Your Investing Radar?
Designed to provide broad exposure to the Mid Cap Value segment of the US equity market, the iShares S&P Mid-Cap 400 Value ETF (IJJ) is a passively managed exchange traded fund launched on 07/24/2000.
The fund is sponsored by Blackrock. It has amassed assets over $6.36 billion, making it one of the larger ETFs attempting to match the Mid Cap Value segment of the US equity market.
Why Mid Cap Value
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.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their 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.
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 0.18%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 19.50% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Jabil Inc (JBL) accounts for about 1.73% of total assets, followed by Equity Lifestyle Properties Reit I (ELS) and Chesapeake Energy Corp (CHK).
The top 10 holdings account for about 9.72% of total assets under management.
Performance and Risk
IJJ seeks to match the performance of the S&P MidCap 400 Value Index before fees and expenses. The S&P MidCap 400 Value Index measures the performance of the mid-capitalization value sector of the U.S. equity market. It is a subset of the S&P MidCap 400 and consists of those stocks in the S&P MidCap 400 exhibiting the strongest value characteristics.
The ETF has lost about -2.66% so far this year and was up about 4.54% in the last one year (as of 10/20/2023). In the past 52-week period, it has traded between $94.93 and $116.09.
The ETF has a beta of 1.18 and standard deviation of 21.24% for the trailing three-year period, making it a medium risk choice in the space. With about 306 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares S&P Mid-Cap 400 Value 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, IJJ 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 Mid-Cap Value ETF (IWS) and the Vanguard Mid-Cap Value ETF (VOE) track a similar index. While iShares Russell Mid-Cap Value ETF has $11.48 billion in assets, Vanguard Mid-Cap Value ETF has $14.62 billion. IWS has an expense ratio of 0.23% and VOE charges 0.07%.
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 S&P Mid-Cap 400 Value ETF (IJJ): ETF Research Reports
Chesapeake Energy Corporation (CHK) : Free Stock Analysis Report
Jabil, Inc. (JBL) : Free Stock Analysis Report
Equity Lifestyle Properties, Inc. (ELS) : Free Stock Analysis Report
Vanguard Mid-Cap Value ETF (VOE): ETF Research Reports
iShares Russell Mid-Cap Value ETF (IWS): ETF Research Reports
