ETFdb Logo
  • ETF Database
  • Channels
    • Themes
      • Active ETF
      • Alternatives Channel
      • Artificial Intelligence
      • China Insights
      • Climate Insights
      • Core Strategies
      • Crypto
      • Disruptive Technology
      • Energy Infrastructure
      • ETF Building Blocks
      • ETF Education
      • ETF Investing
      • ETF Strategist
      • Faith-Based Investing
      • Financial Literacy
      • Fixed Income
      • Free Cash Flow
      • Innovative ETFs
      • Invest Beyond Cash
      • Leveraged & Inverse
      • Modern Alpha
      • Portfolio Strategies
      • Tax Efficient Income
    • Asset Class
      • Equity
        • U.S. Equity
        • Int'l Developed
        • Emerging Market Equities
      • Alternatives
        • Gold/Silver/Critical Materials
        • Crypytocurrency
        • Currency
        • Volatility
      • Fixed Income
        • Investment Grade Corporates
        • US Treasuries & TIPS
        • High Yield Corporates
        • Int'l Fixed Income
    • ETF Ecosystem
    • ETFs in Canada
    • Market Outlook
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Database Categories
    • Indexes
    • Scenario Analysis
    • Watchlists
    • Head-To-Head ETF Comparison Tool
    • Mutual Fund To ETF Converter
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
  • Research
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF of the Week Podcast
    • Gaining Perspective Podcast
    • ETF Prime Podcast
    • Video
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Dual Impact Channel
  2. IQSM ETF May Shine Bright in 2023
Dual Impact Channel
Share

IQSM ETF May Shine Bright in 2023

Tom LydonDec 08, 2022
2022-12-08

Mid-cap stocks are often said to be overlooked relative to their large- and small-cap peers. Throw environmental, social, and governance (ESG) into the equation, and it’s not a stretch to say that many investors aren’t aware of this potentially potent combination.

Thanks to the newly minted IQ Candriam ESG U.S. Mid Cap Equity ETF (IQSM B), investors can efficiently access the mid-cap/ESG combination. IQSM debuted in late October and follows the IQ Candriam ESG US Mid Cap Equity Index.

That could amount to good timing because quiet as it has been kept, mid-cap stocks are performing less poorly than large-cap rivals this year, and some market observers expect that condition will carry over into 2023.

“However, beneath the surface the picture is very different. This is because a change in market leadership is underway which we think will continue into 2023, and potentially longer. Although large caps outperformed strongly in January 2022, since then small and mid caps have been steadily outperforming,” according to Schroders research.

IQSM holds 211 stocks, none of which exceed a weight of 1.3%, indicating that approximately half the universe of the S&P MidCap 400 Index has ESG credentials strong enough to enter this ETF.

IQSM is potentially appealing to long-term investors because mid-cap stocks, over long holding periods, often outperform large- and small-cap names with less volatility than smaller stocks. By introducing the ESG overlay, IQSM could ratchet up those favorable traits. Additionally, an equity market regime change could be a 2023 catalyst for IQSM.

“Over much of the last decade, investing exclusively in the S&P 500 would have been the best decision. However, change is now underway. There are now good reasons for investors to broaden their allocations into mid and small cap US companies that are more attractively valued and better positioned for a changing market environment,” added Schroders.

IQSM also isn’t as growth-heavy as large-cap ESG ETFs. In fact, the mid-cap ETF has some value traits, which could be useful, as some market observers expect value will continue outpacing growth next year. For example, industrial, financial services, and healthcare stocks combine for over 44% of IQSM’s roster. Plus, mid-caps offer an often-overlooked size advantage.

“It’s also important to remember, given the size of the US economy, even ‘small’ US-focused companies are large by international standards. This is important at a time when investors are rediscovering risk, as liquidity tightens due to rising interest rates, triggering a range of stresses. With market valuations ranging up to $20 billion, however, US small and mid caps are a well-traded and liquid asset class full of opportunities,” concluded Schroders.

For more news, information, and strategy, visit the Dual Impact Channel.

Loading Articles...
Our Sites
  • VettaFi
  • Advisor Perspectives
  • ETF Trends
Tools
  • ETF Screener
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Database Pro
More Tools
  • Financial Advisor & RIA Center
Explore ETFs
  • ETF News
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Information
  • Contact Us
  • Terms of Use and Privacy Policy
  • © 2025 VettaFi LLC. All rights reserved.

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X