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?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well 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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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 $694.89 million, making it one of the average sized ETFs in the Style Box - Mid Cap Value. This particular fund, before fees and expenses, 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 1.39%.
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.
EZM's heaviest allocation is in the Financials sector, which is about 19.20% of the portfolio. Its Consumer Discretionary and Industrials round out the top three.
When you look at individual holdings, Fox Corp - Class A (FOXA) accounts for about 1.04% of the fund's total assets, followed by Walgreen Boots Alliance Inc (WBA) and Albertsons Cos Inc - Class A (ACI).
The top 10 holdings account for about 7.91% of total assets under management.
Performance and Risk
The ETF has lost about -11.44% and is down about -1.16% so far this year and in the past one year (as of 04/18/2025), respectively. EZM has traded between $51.81 and $68.19 during this last 52-week period.
EZM has a beta of 1.09 and standard deviation of 22.11% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 555 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 $12.50 billion in assets, Vanguard Mid-Cap Value ETF has $16.42 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 Albertsons Companies, Inc. (ACI): Free Stock Analysis Report Fox Corporation (FOXA): Free Stock Analysis Report Walgreens Boots Alliance, Inc. (WBA): Free Stock Analysis Report Vanguard Mid-Cap Value ETF (VOE): ETF Research Reports iShares Russell Mid-Cap Value ETF (IWS): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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