This is a passive ETF that quantitatively selects U.S. mid-cap stocks based on environmental, social, and governance criteria. It maintains exposure close to the broader mid-cap market while adjusting individual stock weights using ESG ratings and quantitative metrics.

It suits investors who want to add an ESG perspective and quantitative screening to their U.S. mid-cap exposure and who can tolerate mid-cap volatility.

It is an ETF managed by New York Life using a passive (index-tracking) approach.

The ETF tracks an index that adjusts the weights of U.S. mid-cap stocks by combining environmental, social, and governance ratings with quantitative metrics. While maintaining exposure close to the broader mid-cap market, it reduces companies that fall short of ESG criteria and adds weight to highly rated stocks.

• Selection that combines ESG criteria and quantitative metrics
• Weight adjustments while maintaining mid-cap market exposure

Assets under management (AUM) stand at $373.3M, and the total expense ratio is 0.15% per year.

Compared with a simple market-cap-weighted mid-cap ETF, the main points of comparison are ESG and quantitative screening and the weight adjustments.

U.S. mid-cap stocks react sensitively to the economic cycle, interest rates, and market risk appetite. Because the ESG and quantitative screening strategy maintains exposure close to the mid-cap market, it generally follows the market's direction, with differences emerging in proportion to the weight adjustments. Given the nature of mid-cap stocks, volatility tends to be higher than for large caps.

Fund flows into ESG and quantitative mid-cap products vary with market risk appetite and demand for sustainability, and money sometimes shifts into this product category when interest in responsible investing rises. It is also worth watching how performance changes with the economic and style cycles.

ESG and quantitative screening and mid-cap exposure are its strengths, while mid-cap volatility, tracking differences, and limited excess returns are the considerations.

For mid-cap exposure without ESG and quantitative screening, direct substitutes include IWR and VO, and IJH is another product worth comparing for different mid-cap exposure. What sets this ETF apart is that it combines ESG criteria and quantitative metrics to select U.S. mid-cap stocks, giving it a stronger stock-selection element than a market-cap-weighted index.

Here are the points to review before investing in IQSM. ESG and quantitative screening and mid-cap exposure are attractive, but mid-cap volatility, tracking differences, and limited excess returns should be checked in advance. It is also a good idea to compare it with simple mid-cap index products.

Mid-cap volatility and the tracking difference from ESG and quantitative screening are the main variables for long-term performance, and the screening can make the portfolio's composition differ from a market-cap-weighted mid-cap index. Given the nature of mid-cap stocks, drawdowns can be large during market crashes.

It is a suitable candidate for investors who want to add an ESG perspective and quantitative screening to U.S. mid-cap exposure. For mid-cap investing without ESG and quantitative screening, consider products such as IWR and VO, and if you want ESG and quantitative screening, it is advisable to compare this product alongside them before choosing.