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If you're interested in broad exposure to the Mid Cap Value segment of the US equity market, look no further than the iShares Russell Mid-Cap Value ETF (IWS), a passively managed exchange traded fund launched on 07/17/2001.

The fund is sponsored by Blackrock. It has amassed assets over $12.98 billion, making it one of the largest 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.

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. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull 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 0.23%, putting it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 1.56%.

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 Industrials sector--about 20.20% of the portfolio. Financials and Real Estate round out the top three.

Looking at individual holdings, Parker-Hannifin Corp- (PH) accounts for about 0.85% of total assets, followed by Constellation Energy Corp- (CEG) and Phillips- (PSX).

The top 10 holdings account for about 7.38% of total assets under management.

Performance and Risk

IWS seeks to match the performance of the Russell MidCap Value Index before fees and expenses. The Russell Midcap Value Index measures the performance of the mid-capitalization value sector of the U.S. equity market.

The ETF has added about 7.54% so far this year and was up about 12.04% in the last one year (as of 07/15/2024). In the past 52-week period, it has traded between $97.63 and $125.33.

The ETF has a beta of 1.10 and standard deviation of 17.89% for the trailing three-year period, making it a medium risk choice in the space. With about 704 holdings, it effectively diversifies company-specific risk.

Alternatives

IShares Russell 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, IWS 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 S&P Mid-Cap 400 Value ETF (IJJ) and the Vanguard Mid-Cap Value ETF (VOE) track a similar index. While iShares S&P Mid-Cap 400 Value ETF has $7.57 billion in assets, Vanguard Mid-Cap Value ETF has $16.46 billion. IJJ has an expense ratio of 0.18% and VOE charges 0.07%.

Bottom-Line

Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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 Russell Mid-Cap Value ETF (IWS): ETF Research Reports

Parker-Hannifin Corporation (PH) : Free Stock Analysis Report

Phillips 66 (PSX) : Free Stock Analysis Report

Vanguard Mid-Cap Value ETF (VOE): ETF Research Reports

iShares S&P Mid-Cap 400 Value ETF (IJJ): ETF Research Reports

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.