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Should Invesco S&P MidCap Quality ETF (XMHQ) Be on Your Investing Radar?
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Looking for broad exposure to the Mid Cap Blend segment of the US equity market? You should consider the Invesco S&P MidCap Quality ETF (XMHQ - Free Report) , a passively managed exchange traded fund launched on 12/01/2006.
The fund is sponsored by Invesco. It has amassed assets over $5.26 billion, making it one of the larger ETFs attempting to match the Mid Cap Blend segment of the US equity market.
Why Mid Cap Blend
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. These types of companies, then, have a good balance of stability and growth potential.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
Costs
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 0.25%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 5.13%.
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 Industrials sector--about 35% of the portfolio. Consumer Discretionary and Financials round out the top three.
Looking at individual holdings, Williams-Sonoma Inc (WSM - Free Report) accounts for about 3.72% of total assets, followed by Manhattan Associates Inc (MANH - Free Report) and Carlisle Cos Inc (CSL - Free Report) .
The top 10 holdings account for about 26.5% of total assets under management.
Performance and Risk
XMHQ seeks to match the performance of the S&P MIDCAP 400 QUALITY INDEX before fees and expenses. The S&P MidCap 400 Quality Index is designed to provide equal-weighted exposure to approximately 800 securities of medium-sized companies in the larger US equity market.
The ETF return is roughly 17.07% so far this year and was up about 27.37% in the last one year (as of 09/16/2024). In the past 52-week period, it has traded between $75.71 and $110.05.
The ETF has a beta of 1.04 and standard deviation of 21.69% for the trailing three-year period. With about 82 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P MidCap Quality ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, XMHQ is a reasonable option for those seeking exposure to the Style Box - Mid Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Mid-Cap ETF (VO - Free Report) and the iShares Core S&P Mid-Cap ETF (IJH - Free Report) track a similar index. While Vanguard Mid-Cap ETF has $67.95 billion in assets, iShares Core S&P Mid-Cap ETF has $88.17 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.
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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Should Invesco S&P MidCap Quality ETF (XMHQ) Be on Your Investing Radar?
Looking for broad exposure to the Mid Cap Blend segment of the US equity market? You should consider the Invesco S&P MidCap Quality ETF (XMHQ - Free Report) , a passively managed exchange traded fund launched on 12/01/2006.
The fund is sponsored by Invesco. It has amassed assets over $5.26 billion, making it one of the larger ETFs attempting to match the Mid Cap Blend segment of the US equity market.
Why Mid Cap Blend
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. These types of companies, then, have a good balance of stability and growth potential.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
Costs
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 0.25%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 5.13%.
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 Industrials sector--about 35% of the portfolio. Consumer Discretionary and Financials round out the top three.
Looking at individual holdings, Williams-Sonoma Inc (WSM - Free Report) accounts for about 3.72% of total assets, followed by Manhattan Associates Inc (MANH - Free Report) and Carlisle Cos Inc (CSL - Free Report) .
The top 10 holdings account for about 26.5% of total assets under management.
Performance and Risk
XMHQ seeks to match the performance of the S&P MIDCAP 400 QUALITY INDEX before fees and expenses. The S&P MidCap 400 Quality Index is designed to provide equal-weighted exposure to approximately 800 securities of medium-sized companies in the larger US equity market.
The ETF return is roughly 17.07% so far this year and was up about 27.37% in the last one year (as of 09/16/2024). In the past 52-week period, it has traded between $75.71 and $110.05.
The ETF has a beta of 1.04 and standard deviation of 21.69% for the trailing three-year period. With about 82 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P MidCap Quality ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, XMHQ is a reasonable option for those seeking exposure to the Style Box - Mid Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Mid-Cap ETF (VO - Free Report) and the iShares Core S&P Mid-Cap ETF (IJH - Free Report) track a similar index. While Vanguard Mid-Cap ETF has $67.95 billion in assets, iShares Core S&P Mid-Cap ETF has $88.17 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.
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.