While U.S. mid-capitalization stocks often exhibit more volatility than the larger blue chips and tech titans that dominate the financial news, they can offer less exposure to portfolio volatility than small-cap stocks typically carry. Most mid-cap stocks don’t offer the attractive dividends that are commonplace with larger companies, but funds with strong holdings of the larger mid-caps (companies with market capitalizations of $6 billion to $10 billion) can include exposure to more dividend-paying stocks that offer income akin to blue chip stocks even though they haven’t quite reached large-cap status yet.
Targeting the mid-cap growth sector
To gain more targeted exposure to U.S. mid-cap stocks while still sustaining a broad and highly diversified approached, investors will choose stocks in growth or value categories to help fine-tune their portfolios. Investors can increase their strategic exposure to the mid-cap growth sector of the U.S. equity market to tilt their portfolio toward growth stocks. Buying and holding funds that seek to track a reliable mid-cap growth index, such as the Russell Midcap Growth Index, can be an easier, efficient and risk-managed strategy to gain this exposure than purchasing a large variety of individual stocks and rebalancing those holdings annually.
The Russell Midcap Growth Index is a popular benchmark for U.S. mid-cap stocks that exhibit growth characteristics – meaning analysts expect them to grow at an above-average rate relative to their market competitors. This index is comprised of about 400 mid-cap companies (with a market capitalization of $2 billion to $10 billion, and average market-cap of $4 billion to $5 billion) that fall into the “growth stock” category. It’s a subset of the much larger pool of stocks in the Russell 1000 Index, which contains the vast majority of all mid-cap and large-cap companies in the U.S.
Using IWP to gain mid-cap growth exposure
To optimize the significant upside potential the mid-cap growth market of U.S. stocks offers while effectively managing risk, investors can use the iShares Russell Mid-Cap Growth ETF (IWP) to achieve cost-effective, well diversified exposure to U.S. mid-caps with strong forecasted growth and higher price-to-book ratios comparable to their peers. This ETF seeks to track the Russell Midcap Growth Index, is reconstituted annually, and trades like a single equity (unlike mutual funds, which typically have more complicated trading rules) – so it provides institutional investors with simple and versatile vehicle to adjust their domestic stock exposure and easily maintain their desired positioning while hundreds of companies continually enter and exit the mid-cap category (and gain or lose their status as “growth stocks” as market analysts continually re-appraise the performance expectations of individual companies and their predicted stock price trajectories).
More details about IWP
IWP is one of three iShares ETFs that seek to track a mid-cap Russell index. The other two are the iShares Russell Mid-Cap ETF (IWR), which seeks long-term growth from a basket of approximated 800 U.S. mid-cap stocks, and iShares Russell Mid-Cap Value ETF (IWS), which offers exposure to approximately 700 U.S. mid-caps that appear to be undervalued.
IWP spreads its top five sector exposures across Information Technology, Health Care, Industrials, Consumer Discretionary, and Financials (see table below).
As of January 20, 2022, the IWP had net assets of $13,910,871,000 and a 30-day average volume of $1,545,341.00.
See the chart below for more details about the iShares Russell Mid-Cap Growth ETF (IWP). You can find more info on IWP here.
Carefully consider the Funds’ investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds’ prospectuses or, if available, the summary prospectuses which may be obtained by visiting www.iShares.com or www.blackrock.com. Read the prospectus carefully before investing.
Investing involves risk, including possible loss of principal.
Diversification and asset allocation may not protect against market risk or loss of principal. Buying and selling shares of ETFs may result in brokerage commissions.
Shares of ETFs may be bought and sold throughout the day on the exchange through any brokerage account. Shares are not individually redeemable from an ETF, however, shares may be redeemed directly from an ETF by Authorized Participants, in very large creation/redemption units. There can be no assurance that an active trading market for shares of an ETF will develop or be maintained.
This material represents an assessment of the market environment as of the date indicated; is subject to change; and is not intended to be a forecast of future events or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding the funds or any issuer or security in particular. The strategies discussed are strictly for illustrative and educational purposes and are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. There is no guarantee that any strategies discussed will be effective.
Past performance does not guarantee future results. For iShares ETF performance, please visit www.iShares.com or www.blackrock.com. The iShares Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”).
The iShares Funds are not sponsored, endorsed, issued, sold or promoted by Russell, nor does this company make any representation regarding the advisability of investing in the Funds. BlackRock is not affiliated with Russell.
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