Additionally, EZM is not too richly valued. The ETF had a P/E of 16.5 and a price-to-book ratio of 1.81 at the end of the second quarter. Those numbers have probably come up a bit, but IJH has a P/E of nearly 27 and a price-to-book ratio of 3.57.
Notably, EZM allocates over 27% of its combined weight to industrial and health care, two of the sectors where mid-caps have been leaders over the past year.
EZM’s largest sector weight is financial services at 21.5%. That is important because small- and mid-cap banks have seen their profits crimped because of low interest rates. The potential upside for EZM is that Federal Reserve tapering has been postponed, not delayed indefinitely. Should tapering reenter the conversation soon and cause another spike in Treasury yields, EZM’s mid-cap bank exposure could prove beneficial. [Too Early to Bank on Regional Bank ETFs]
WisdomTree MidCap Earnings Fund
ETF Trends editorial team contributed to this post.