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Should WisdomTree U.S. MidCap ETF (EZM) Be on Your Investing Radar?

Launched on 02/23/2007, the WisdomTree U.S. MidCap ETF (EZM) is a passively managed exchange traded fund designed to provide a broad exposure to the Mid Cap Value segment of the US equity market.

The fund is sponsored by Wisdomtree. It has amassed assets over $703.87 million, making it one of the average sized ETFs attempting to match the Mid Cap Value segment of the US equity market.

Why Mid Cap Value

With market capitalization between $2 billion and $10 billion, mid cap companies usually contain higher growth prospects than large cap companies, and are considered less risky than their small cap counterparts. These types of companies, then, have a good balance of stability and growth potential.

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Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.

Costs

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.

Annual operating expenses for this ETF are 0.38%, putting it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 1.41%.

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 Financials sector--about 21.90% of the portfolio. Consumer Discretionary and Industrials round out the top three.

Looking at individual holdings, Ovintiv Inc (OVV) accounts for about 0.98% of total assets, followed by Nrg Energy Inc (NRG) and Cleveland-Cliffs Inc (CLF).

The top 10 holdings account for about 7.26% of total assets under management.

Performance and Risk

EZM seeks to match the performance of the WisdomTree U.S. MidCap Earnings Index before fees and expenses. 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.

The ETF has lost about -14.76% so far this year and is down about -12.60% in the last one year (as of 11/03/2022). In the past 52-week period, it has traded between $43.88 and $57.18.

The ETF has a beta of 1.20 and standard deviation of 31.27% for the trailing three-year period, making it a medium risk choice in the space. With about 572 holdings, it effectively diversifies company-specific risk.

Alternatives

WisdomTree U.S. MidCap 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, EZM is a reasonable option for those seeking exposure to the Style Box - Mid Cap Value area of the market. Investors might also want to consider some other ETF options in the space.

The iShares Russell MidCap Value ETF (IWS) and the Vanguard MidCap Value ETF (VOE) track a similar index. While iShares Russell MidCap Value ETF has $12.66 billion in assets, Vanguard MidCap Value ETF has $15.37 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.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
WisdomTree U.S. MidCap ETF (EZM): ETF Research Reports
 
NRG Energy, Inc. (NRG) : Free Stock Analysis Report
 
ClevelandCliffs Inc. (CLF) : Free Stock Analysis Report
 
Vanguard MidCap Value ETF (VOE): ETF Research Reports
 
iShares Russell MidCap Value ETF (IWS): ETF Research Reports
 
Ovintiv Inc. (OVV) : Free Stock Analysis Report
 
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Zacks Investment Research