Should iShares Morningstar Mid-Cap ETF (IMCB) Be on Your Investing Radar?

Launched on 06/28/2004, the iShares Morningstar Mid-Cap ETF (IMCB) is a passively managed exchange traded fund designed to provide a broad exposure to the Mid Cap Blend segment of the US equity market.

The fund is sponsored by Blackrock. It has amassed assets over $1.07 billion, making it one of the average sized 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. Thus, companies that fall under this category provide a stable and growth-heavy investment.

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

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 0.04%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 1.43%.

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.

This ETF has heaviest allocation to the Industrials sector--about 15.90% of the portfolio. Financials and Information Technology round out the top three.

Looking at individual holdings, Microstrategy Inc Class A (MSTR) accounts for about 0.87% of total assets, followed by Arthur J Gallagher (AJG) and Williams Inc (WMB).

The top 10 holdings account for about 6.67% of total assets under management.

Performance and Risk

IMCB seeks to match the performance of the MORNINGSTAR US MID CAP INDEX before fees and expenses. The Morningstar US Mid Cap Index comprises of mid-capitalization U.S. equities.

The ETF has gained about 2.62% so far this year and it's up approximately 12.42% in the last one year (as of 06/04/2025). In the past 52-week period, it has traded between $65.41 and $82.17.

The ETF has a beta of 1.03 and standard deviation of 18.22% for the trailing three-year period. With about 439 holdings, it effectively diversifies company-specific risk.

Alternatives

IShares Morningstar Mid-Cap 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, IMCB is a sufficient 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) and the iShares Core S&P Mid-Cap ETF (IJH) track a similar index. While Vanguard Mid-Cap ETF has $79.90 billion in assets, iShares Core S&P Mid-Cap ETF has $92.77 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.

Bottom-Line

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

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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This article originally published on Zacks Investment Research (zacks.com).

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