Yahoo Finance Is WisdomTree U.S. MidCap ETF (EZM) a Strong ETF Right Now?
Making its debut on 02/23/2007, smart beta exchange traded fund WisdomTree U.S. MidCap ETF (EZM) provides investors broad exposure to the Style Box - Mid Cap Value category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by Wisdomtree. EZM has been able to amass assets over $796.63 million, making it one of the average sized ETFs in the Style Box - Mid Cap Value. Before fees and expenses, this particular fund seeks to match the performance of the WisdomTree U.S. MidCap Earnings Index.
The WisdomTree U.S. MidCap Index is a fundamentally weighted index that measures the performance of earnings-generating companies within the mid-capitalization segment of the U.S. Stock Market.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.38% for EZM, making it on par with most peer products in the space.
EZM's 12-month trailing dividend yield is 1.30%.
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.
For EZM, it has heaviest allocation in the Industrials sector --about 19.60% of the portfolio --while Financials and Consumer Discretionary round out the top three.
Taking into account individual holdings, Toll Brothers Inc (TOL) accounts for about 0.99% of the fund's total assets, followed by American Airlines Group Inc (AAL) and Unum Group (UNM).
The top 10 holdings account for about 7.25% of total assets under management.
Performance and Risk
The ETF return is roughly 3.89% and was up about 26.19% so far this year and in the past one year (as of 06/03/2024), respectively. EZM has traded between $47.01 and $61.02 during this last 52-week period.
EZM has a beta of 1.22 and standard deviation of 21.10% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 549 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. MidCap ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell Mid-Cap Value ETF (IWS) tracks Russell MidCap Value Index and the Vanguard Mid-Cap Value ETF (VOE) tracks CRSP U.S. Mid Cap Value Index. IShares Russell Mid-Cap Value ETF has $12.79 billion in assets, Vanguard Mid-Cap Value ETF has $16.40 billion. IWS has an expense ratio of 0.23% and VOE charges 0.07%.
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 Value.
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.
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WisdomTree U.S. MidCap ETF (EZM): ETF Research Reports
Unum Group (UNM) : Free Stock Analysis Report
Toll Brothers Inc. (TOL) : Free Stock Analysis Report
American Airlines Group Inc. (AAL) : Free Stock Analysis Report
Vanguard Mid-Cap Value ETF (VOE): ETF Research Reports
iShares Russell Mid-Cap Value ETF (IWS): ETF Research Reports
