IShares S&P Mid-Cap 400 Growth ETF IJK is a compelling option in the mid-cap growth Morningstar Category. While its portfolio looks different from most, its low fee, broad diversification, and slight quality tilt make it hard to beat. 

The fund tracks the S&P MidCap 400 Growth Index, which sweeps in stocks from the faster-growing half of the S&P MidCap 400 Index. Mid-cap growth stocks tend to have high valuations because of investor sentiment around their superior growth prospects. These valuations represent the market's consensus opinion, but they may not always be justified, making this a relatively volatile market segment. S&P employs a simple profitability screen that should steer the portfolio away from the most volatile names in the category.

Market-cap-weighting efficiently allocates the portfolio's holdings because it harnesses the market's consensus opinion of each stock's relative value. Stocks that grow in size take up a larger share of the portfolio, while smaller companies that may be struggling take on less important roles. Market-cap-weighting also dials back turnover, which consistently averages less than the typical peer.

The S&P MidCap 400 Index operates on the smaller end of the mid-cap market, collecting the next 400 largest profitable companies in the United States after the S&P 500 amasses the largest 500. Other mid-cap index funds share numerous holdings with the S&P 500, which this fund is largely unable to do. This keeps the fund's average market cap below peers equipped to hold larger stocks. Smaller stocks tend to be more volatile than their larger peers but including only profitable names should help insulate the portfolio from excess volatility.

The fund steers away from excessive growth-friendly sector concentrations that many peers embrace. This creates pronounced sector biases relative to the category average, which can lead to disparate returns when these sectors come in and out of favor. Technology stocks, for example, claim just 15% of the portfolio, 11 percentage points less than a typical peer. Industrials garner the most attention, with 26% of the portfolio, 9 percentage points more than the category average.

Avoiding unprofitable stocks and tempering exposure to the riskiest sectors benefited fund performance since its inception in 2000. From August 2000 through December 2023, the fund outpaced the category average by more than 2 percentage points annualized. It even managed to post lower volatility despite a smaller average holding size. Going forward, the fund's low fee and profitability bias should support a continued advantage.

Analyst Rating

A less representative but still appealing mid-cap growth ETF.

Analyst

Zachary Evens

Vistra Energy

Reliance Steel & Aluminum

Carlisle Companies

Williams-Sonoma

GoDaddy

EMCOR Group

Pure Storage

Graco

Saia

Lennox International

A slight quality tilt and sound diversification should minimize the risks of the fund's smaller orientation. It earns an Above Average Process Pillar rating.

Above Average

Process

BlackRock's industry-leading technology, global footprint, and extensive supporting cast earn an Above Average People Pillar rating. The team employs BlackRock's Aladdin platform to fulfill much of its portfolio management tasks, and global trading desks allow traders to conduct foreign transactions in a cost-effective way.

The U.S.-based iShares index equity team has endured some internal turnover at the top over the past few years. But index-tracking performance should remain tight, thanks to heavily automated processes, a large team of seasoned professionals, and several long-tenured managers who remain at the helm, such as Greg Savage, who has managed this fund since 2008. Amy Whitelaw left the team in February 2023 for another role within the organization. Paul Whitehead replaced Alan Mason as a manager in January 2022 when Mason left to focus on the firm's customized institutional indexing capabilities. The broader index equity group, co-headed by Jennifer Hsui and Whitehead, will continue to oversee iShares equity ETFs.

All managers interact with a wider team of traders and managers around the globe to execute the funds' day-to-day operations. The larger number of managers also limits the impact of personnel turnover when it does occur.

People

BlackRock offers compelling options across asset classes and vehicles. It earns an Above Average rating for Parent. 
The firm’s approximately USD 8 trillion in assets under management, as of Sept. 30, 2022, gives it unparalleled scale and influence. It is a market-leading index fund provider globally, and its iShares exchange-traded fund franchise offers a low-cost lineup of core funds that investors can use to build a well-diversified portfolio for dirt cheap. The firm can be more adventurous in its ETF launches than some peers, so not everything it launches is appropriate for the masses. As a result, it is likely to have more ETF closures than peers that stick to the basic building blocks.  
The firm’s active fixed-income and multi-asset efforts also stand out as some of the best in the industry. Those benefit from BlackRock’s commitment to building a first-class risk management system via its Aladdin analytics software. The software is also available for sale to other firms and has proved to be a popular option for competitors, a testament to its usefulness. 
More recently, the firm has shifted its focus to ESG offerings and incorporating ESG across its investment lineup, leading to a political backlash in the United States.
BlackRock isn’t the best at everything it tries to do, but retail investors, financial advisors, and large institutions could all build robust portfolios using BlackRock’s products.

Parent

iShares S&P Mid-Cap 400 Growth ETF

IJK tracks a market-cap-weighted index of growth companies culled from the S&P 400.

Looking for broad exposure to the Mid Cap Growth segment of the US equity market? You should consider the iShares S&P Mid-Cap 400 Growth ETF (IJK), a passively managed exchange traded fund launched on 07/24/2000.

Should iShares S&P Mid-Cap 400 Growth ETF (IJK) Be on Your Investing Radar?

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For the iShares S&P Mid-Cap 400 Growth ETF (IJK), we found that the implied analyst target price for the ETF based upon its underlying holdings is $251.90 per unit.

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For the iShares S&P Mid-Cap 400 Growth ETF (IJK), we found that the implied analyst target price for the ETF based upon its underlying holdings is $248.69 per unit.

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For the iShares S&P Mid-Cap 400 Growth ETF, we found that the implied analyst target price for the ETF based upon its underlying holdings is $247.22 per unit.

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For the iShares S&P Mid-Cap 400 Growth ETF, we found that the implied analyst target price for the ETF based upon its underlying holdings is $248.90 per unit.

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News for iShares S&P Mid-Cap 400 Growth ETF ETF (IJK)