We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Invesco S&P MidCap 400 Equal Weight ETF (EWMC) a Strong ETF Right Now?
Read MoreHide Full Article
The Invesco S&P MidCap 400 Equal Weight ETF made its debut on 12/03/2010, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Mid Cap Blend category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Invesco. EWMC has been able to amass assets over $201.51 million, making it one of the average sized ETFs in the Style Box - Mid Cap Blend. This particular fund seeks to match the performance of the S&P MidCap 400 Equal Weight Index before fees and expenses.
The S&P MidCap 400 Equal Weight Index equally weights mid-cap securities in the S&P MidCap 400 Index.
Cost & Other Expenses
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 EWMC are 0.40%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.15%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector - about 17.90% of the portfolio. Consumer Discretionary and Financials round out the top three.
Taking into account individual holdings, Pbf Energy Inc (PBF - Free Report) accounts for about 0.30% of the fund's total assets, followed by Antero Resources Corp (AR - Free Report) and Jazz Pharmaceuticals Plc (JAZZ - Free Report) .
The top 10 holdings account for about 2.69% of total assets under management.
Performance and Risk
The ETF return is roughly 11.25% and is up about 4.31% so far this year and in the past one year (as of 02/15/2023), respectively. EWMC has traded between $75.06 and $95.15 during this last 52-week period.
The ETF has a beta of 1.21 and standard deviation of 30.90% for the trailing three-year period, making it a medium risk choice in the space. With about 402 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P MidCap 400 Equal Weight ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Mid-Cap ETF (VO - Free Report) tracks CRSP US Mid Cap Index and the iShares Core S&P Mid-Cap ETF (IJH - Free Report) tracks S&P MidCap 400 Index. Vanguard Mid-Cap ETF has $54.71 billion in assets, iShares Core S&P Mid-Cap ETF has $70.35 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Mid Cap Blend.
Bottom Line
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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is Invesco S&P MidCap 400 Equal Weight ETF (EWMC) a Strong ETF Right Now?
The Invesco S&P MidCap 400 Equal Weight ETF made its debut on 12/03/2010, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Mid Cap Blend category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Invesco. EWMC has been able to amass assets over $201.51 million, making it one of the average sized ETFs in the Style Box - Mid Cap Blend. This particular fund seeks to match the performance of the S&P MidCap 400 Equal Weight Index before fees and expenses.
The S&P MidCap 400 Equal Weight Index equally weights mid-cap securities in the S&P MidCap 400 Index.
Cost & Other Expenses
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 EWMC are 0.40%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.15%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector - about 17.90% of the portfolio. Consumer Discretionary and Financials round out the top three.
Taking into account individual holdings, Pbf Energy Inc (PBF - Free Report) accounts for about 0.30% of the fund's total assets, followed by Antero Resources Corp (AR - Free Report) and Jazz Pharmaceuticals Plc (JAZZ - Free Report) .
The top 10 holdings account for about 2.69% of total assets under management.
Performance and Risk
The ETF return is roughly 11.25% and is up about 4.31% so far this year and in the past one year (as of 02/15/2023), respectively. EWMC has traded between $75.06 and $95.15 during this last 52-week period.
The ETF has a beta of 1.21 and standard deviation of 30.90% for the trailing three-year period, making it a medium risk choice in the space. With about 402 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P MidCap 400 Equal Weight ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Mid-Cap ETF (VO - Free Report) tracks CRSP US Mid Cap Index and the iShares Core S&P Mid-Cap ETF (IJH - Free Report) tracks S&P MidCap 400 Index. Vanguard Mid-Cap ETF has $54.71 billion in assets, iShares Core S&P Mid-Cap ETF has $70.35 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Mid Cap Blend.
Bottom Line
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.