Core Viewpoint - The current high valuations of mega-cap tech stocks, such as NVIDIA at 46x earnings, make mid-cap value stocks an attractive alternative for investors seeking lower-risk opportunities [2][3]. Performance Overview - The SPDR S&P 400 Mid-Cap Value ETF (MDYV) has delivered an 11% gain over the past year and a 69% return over the last five years, indicating a significant valuation gap compared to the Nasdaq-100's 98% return during the same period [3][5]. - The fund's performance suggests that mid-cap value stocks have been overlooked as investors have focused on mega-cap tech [3]. Fund Characteristics - MDYV is priced at $89 per share with a 0.15% expense ratio, providing access to nearly 300 mid-cap companies that trade at lower multiples compared to big tech [4]. - The fund allocates 26% to financials and 19% to industrials, making it sensitive to interest rate changes [5][7]. Interest Rate Impact - The trajectory of interest rates is identified as the most significant factor influencing MDYV's performance over the next 12 months, particularly due to its heavy allocation in financials [7]. - Rising interest rates could benefit MDYV's financial holdings by expanding net interest margins, while falling rates could negatively impact these sectors [7][8]. Competitive Comparison - The Vanguard Mid Cap Value ETF (VOE) charges a lower expense ratio of 0.07% and offers a yield of 2.1%, with a turnover rate of 19% compared to MDYV's 37% [5].

Core Insights - The article compares two iShares ETFs: ISCV, which targets small-cap value stocks, and IJJ, which focuses on mid-cap value stocks, highlighting their different investment strategies and characteristics [4][5]. Group 1: ETF Characteristics - ISCV tracks a Morningstar index of small-cap U.S. value stocks, encompassing 1,093 holdings, with a sector mix leaning towards financial services (21%), consumer cyclicals (16%), and industrials (13%) [2][4]. - IJJ targets mid-cap value through the S&P 400 Value, consisting of 309 stocks, with a heavier tilt towards financial services (19%), industrials (15%), and consumer cyclicals (12%) [1][4]. - ISCV has a lower expense ratio of 0.06% compared to IJJ's 0.18%, and offers a slightly higher dividend yield of 1.89% versus IJJ's 1.66% [3][9]. Group 2: Performance and Liquidity - IJJ has a larger asset base of approximately $8 billion, providing greater liquidity, while ISCV holds about $575 million in assets [5][9]. - ISCV offers broader diversification with nearly four times as many stocks as IJJ, which may appeal to investors seeking a wider range of small-cap opportunities [5][8]. - The historical performance indicates that IJJ has experienced a gentler drawdown compared to ISCV, which may be more volatile due to its focus on smaller companies [5][10]. Group 3: Investment Considerations - Investors must consider their risk tolerance and target company size when choosing between ISCV and IJJ, as ISCV may offer higher growth potential but with greater volatility, while IJJ provides more stability [7][10]. - Both funds deliver solid value exposure, making the decision largely dependent on whether investors prefer small-cap growth or mid-cap stability [4][10].