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IMCV — Deck

iShares Morningstar Mid-Cap Value ETF · IMCV · NASDAQ

IMCV is a passively managed BlackRock iShares ETF that holds roughly 290 U.S. mid-cap value stocks selected by a Morningstar index, charges 0.06% a year, and uses in-kind redemption to keep capital-gains distributions near zero.

$88
Price (Apr 27, 2026)
$1.0B
AUM (Mar 2026)
0.06%
Expense ratio
~290
Holdings
Launched 2004 as JKI; rebased and rebranded IMCV in April 2021 at $63 alongside a 78% fee cut; compounded to $88 today, plus a ~2% trailing yield.
2 · The variant

The wrong vehicle for the rotation people are buying it for.

  • The rotation is small-cap-shaped. Roughly 40% of Russell 2000 debt is floating-rate vs under 10% in the S&P 500, and OBBBA bonus depreciation effective Jan 1, 2026 disproportionately helps capex-heavy small-caps. Russell 2000 Value (IWN) has put up +8.9% YTD against IMCV's +3.56% — a 5-point spread inside the same factor narrative.
  • Index choice dwarfs the fee debate. The IMCV/VOE/IWS conversation gets framed as a 1–17 bp fee fight. Methodology produces 50–150 bps of style-cycle return variance — an order of magnitude bigger. S&P 400 Value funds beat Russell-based IWS by ~80 bps annualized over 10 years on the GAAP-profitability screen alone.
  • Flows lag, they don't lead. The Russell Investments +394% Q4-2025 add hit AFTER the September rotation began; Jones Financial's +1,200% Q1-2025 add hit AFTER CY2025's +13.4% NAV print. Mid-cap value lost $106B of category outflows over the prior five years — chasing trailing performance, not anticipating it.
The wrapper isn't the question. What thesis are you actually expressing is.
3 · The 2021 reset

The 22-year track record is two different products spliced together.

Before: From its 2004 launch through early 2021, the fund traded as JKI — iShares Morningstar Mid-Cap Value at a 0.27% expense ratio against the narrower Morningstar US Mid Value Index. AUM sat at $458M at FY2021 close, portfolio turnover ran 95%, and the quoted price reached $190 by mid-April 2021.

Pivot: On March 22, 2021 BlackRock cut the fee 78% to 0.06% and re-licensed the underlying index to the broader Morningstar US Mid Cap Broad Value Index. A price-rebasing corporate action on April 19, 2021 reset the quoted price from $190 to $63. This is the entire economic history of IMCV worth knowing.

Today: Five years on, AUM has compounded to $975M (+52% in just eleven months), the calendar-year tracking gap has stayed inside the 6 bp fee in four of five years, and Morningstar awarded a Bronze medal effective January 31, 2026. Anyone running a backtest on the long IMCV series is mixing two different products.

Effective history: five years, not twenty-two.
4 · The wrapper math

On every promise the prospectus makes, the fund delivers.

0.06%
Expense ratio tied for category floor
3 bp
FY25 tracking gap inside the fee
$975M
AUM (Mar 2026) +52% in 11 months
10.07%
10-yr NAV return benchmark 10.23%

AUM jumped from $643M (Apr 2025) to $975M (Mar 2026), of which roughly $212M is real net subscriber inflow — share count climbed from 9.0M to 11.5M, +28%. Distributions per share grew at a 9.5% CAGR over four years to $1.86 in FY25 with no long-term capital-gains pass-through, courtesy of the in-kind redemption mechanism that flushed $28.4M of FY25 realized gains tax-free. The wrapper does exactly what passive ETFs are supposed to do.

5 · What you actually own

What you bought three years ago is not the basket you hold today.

  • Financials creeping toward 20%. Sector weight has climbed 17.7% (FY24) → 18.4% (FY25) → 19.3% (FY26 H1) without a corresponding new risk factor. Top-10 holdings include PNC, US Bancorp, and Capital One — primary regional banks that thrive in rate-cut cycles and break in credit-stress recessions.
  • Energy nearly doubled, real estate cut a quarter. Energy weight rose from 6.1% in FY24 to 10.0% in FY26 H1; real estate dropped from 8.0% to 6.0% over the same window. These are Morningstar's index decisions, not BlackRock's — but they shift the cyclical/defensive balance under shareholders' feet.
  • June 19, 2026 is the basket reset. The semi-annual full reconstitution mechanically locks in the next six months of factor exposure. A reconstitution that pushes financials above 20% or trims energy below 8% is the bear's pro-cyclical-trap signal; a broadening of the mix validates the 'broad value' label on the tin.
Index methodology, not the manager, decides what 'mid-cap value' means inside this fund.
6 · Bull and Bear

Lean long, but the entry isn't neutral — price sits at the 94th percentile of its 52-week range.

  • For. The wrapper is essentially perfect — 6 bp fee, 3 bp tracking gap, A− governance, 12/100 forensic risk score. The $212M of net subscriber creations is documented flow, not market-up flattery.
  • For. Basket P/E sits at 18.1× vs the S&P 500 at 24× (~25% discount); P/B 2.3× vs 4.0× (~40% discount). Widest valuation gap to the broad market the basket has shown in a decade; YTD spread to the S&P 500 is ~6 points in IMCV's favor.
  • Against. The 10-year factor regime weighs more than four months of YTD reversal: mid-caps lagged large-caps by ~3 ppts annualized, $106B of category outflows over five years, and FY25 trailed the broad market by 612 bps in a benign environment.
  • Against. Permanent #5 to Vanguard's VOE on AUM ($34.7B vs $1.0B) and bid-ask (0.02% vs 0.07%). The inferior-liquidity vehicle gets sold first when a rotation falters, and a 5 bp round-trip eats almost a year of expense-ratio savings on every rebalance.
Lean long, wait for confirmation. The condition that flips this to a clean long is two consecutive quarters of positive net flows alongside continued mid-cap-value outperformance vs the S&P 500, with AUM crossing $1.5B and no weekly close below the 200-day SMA at $82.40.

Watchlist to re-rate: The IWN-minus-IMCV rolling 6-month spread (is the rotation really small-cap-shaped?); the June 19 Morningstar full reconstitution sector mix; the FY2026 N-CSR in late June for AUM and tracking-gap confirmation.