The MidCao index is considered to be the SA Inc. index as the Top40 is dominated by global and offshore earning stocks whereas the MidCap is mostly local South African businesses. With lots of value in smaller sized stocks on the JSE, this is a great index to capture that growth in earnings and ultimately re-rating in share prices that will flow through to the index and the ETF.
The top 10 holdings illustrate this as below.
MidCap holdings at 31Dec21
Further the current historic PE of the index is under 13x while the Top40 is almost 15x and the Indi25 the most expensive at almost 22x. For reference, Resi10 is the cheapest at just under 12x and the Fini15 over 14x.
The sectors within the MidCap are dominated by financials at 31% followed by consumer staples at 13%, consumer discretionary at 12.7% and property at 11.2%.
The index is trading at all-time highs having almost doubled in value since the 2020 pandemic lows, but that doesn’t mean ore upside isn’t likely.
MidCap index
The one risk of this index is that as stocks fall out of the Top40 index they fall into the MidCap with a large weighting and if the stock keeps on falling, it’ll drag down the MidCap index to a degree. But it also gets the new up-and-coming stocks albeit in a small weighting initially.
But with sixty stocks in the index, even the largest weighting is just over 5%.
The current dividend yield is 2.9% with the third quarter dividend last year of 10.16c being the largest ever from this ETF. Dividends should continue to grow and as we come out of the pandemic we may even see some special dividends from stocks within the ETF that will be passed onto investors.
NOTE: FNB took over management of this ETF from Ashburton earlier in February.
| ETF name | FNB MidCap ETF |
| JSE code | FNBID |
| ETF issuer | FNB |
| Issue date | 15 August 2012 |
| Total investment cost | 0.74% |
| ETF Benchmark | MidCap (J201) |
| Tax-free savings account | Allowed |
| Market cap | R588million |
| Performance 1 year | +18.4% |
| Performance 3 years | +16.6% |
| Performance 5 years | +3.1% |
| Dividend yield | 2.9% |
ETF blog
At Just One Lap, we are big fans of passive investment using ETFs. In this weekly blog, we discuss ETFs on the local market and the factors you need to consider when choosing an ETF. If you have wondered how one ETF differs from another, this is where you can find out. We explain which index each ETF tracks, what type of portfolio could benefit from holding each ETF, and how the costs will affect your bottom line.