ETF Trends
ETF Trends

Mid-Cap Equity ETFs have seen some redemption flows in the past several trading sessions amid global equity market pressure and ahead of incoming corporate earnings season.

The largest fund in the segment, IJH (iShares Core S&P Mid Cap, Expense Ratio 0.15%, $26.7 billion in AUM) has seen about $300 million leave via redemptions lately, and in what is undoubtedly related activity, the second largest ETF here MDY (SPDR MidCap, Expense Ratio 0.25%, $16.2 billion in AUM) has also experienced outflows, to the tune of about $250 million.

In spite of the short term outflows, IJH has still posted strong net flows year to date, with about $1.6 billion being added to the fund via creation activity, while MDY has only added about $121 million year to date.

Other prominent Mid Cap Equity ETFs in terms of their AUM sizes include IWR (iShares Russell Mid Cap, Expense Ratio 0.22%, $12.9 billion in AUM) and VO (Vanguard Mid Cap, Expense Ratio 0.09%, $12.1 billion in
AUM).

When we look at top holdings in IJH for instance, we see a very diversified basket, where the top holding only makes up 0.74% of the portfolio, that stock being QRVO. Other top holdings in order of weightings are AAP (0.68%), CHD (0.67%), SIG (0.63%), and WAB (0.59%).

Given the redemption flows in the Mid-Cap space ahead of earnings season, it makes sense to be cognizant of several inverse and leveraged inverse funds here that exist and may see upticks in trading activity. These funds include: MIDZ (Direxion Daily Mid Cap Bear 3X, Expense Ratio 0.95%), MYY (ProShares Short MidCap400, Expense Ratio 0.95%), MZZ (ProShares UltraShort MidCap400, Expense Ratio 0.95%), and SMDD (ProShares UltraPro Short MidCap400, Expense Ratio 0.95%).

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