Hotchkis & Wiley added an ETF class to its 1997 mid-cap value fund
The Hotchkis & Wiley Mid-Cap Value Fund, HWMV, began trading on Nasdaq on September 24, 2026, as an ETF class of a mutual fund that held $448 million as of August 31, while the new class held $491,000 as of October 4.
Key takeaways
Hotchkis & Wiley listed an exchange-traded class of its mid-cap value mutual fund on Thursday, September 24, and the mutual fund remains a mutual fund. The ticker, HWMV, is that same fund, with the same team and the same stocks, mid-sized companies the firm considers undervalued.
The mutual fund opened on January 2, 1997, and held $448 million as of Monday, August 31. The ETF class held $491,000 as of Sunday, October 4, equal to 20,000 shares. That is one creation unit, the block large trading firms, not ordinary investors, can create or redeem with the fund.
This is the firm's fifth ETF. The July class of its fund of non-U.S. value stocks, HWIV, held $1.5 million as of Monday, October 5, and the August class of its fund of U.S. and foreign value stocks, HWGV, held $3.8 million the same day.
"Mid-cap value is an area where we're currently finding a number of undervalued companies, and this ETF gives investors an additional way to access that opportunity with the intraday liquidity and tax efficiency that ETFs can offer," Scott McBride, Hotchkis & Wiley's chief executive, said on Thursday.
Trading has not produced that liquidity yet. ETF shares trade at a market price through the day, and in the seven full sessions from the listing through Friday, October 2, this class traded about 550 shares a day, roughly $13,600 of stock. Five of those sessions traded 211 shares or fewer.
Only two sessions cleared 1,000 shares
The firm's documents say a trade in one class can create costs and taxes for the other. Holders of this class, unlike investors in a standalone ETF, can face extra trading costs and taxable gains when mutual-fund shareholders buy or sell.
The ETF class charges 0.94% a year, a 0.75% management fee and 0.19% in other expenses, with no distribution fee.
Institutional shares of the same fund, HWMIX, charge 0.99% as of Tuesday, June 30, and they require $250,000 to start. The ETF class costs 0.05 percentage points less, and a broker can sell one share.
Class A shares, HWMAX, charge 1.20% as of Tuesday, June 30, 0.26 percentage points more than the ETF class, and they require $2,500. The firm lists a 5.25% sales charge on Class A investments under $25,000. A small account that wants this book is weighing that sales charge against the ETF class.
The ETF class has no record of its own. Hotchkis & Wiley reports an average annual total return of 14.58% for the institutional shares over the three years through August 31, 2026, against 17.45% for the Russell Midcap Value Index, and 13.17% a year over five years, against 9.56%.
What already exists
Investors who want U.S. mid-cap value, rather than this book, can pay less. Avantis U.S. Mid Cap Value ETF, AVMV, an actively managed fund of mid-sized value stocks, charges 0.20%, 0.74 percentage points less than this class, and held $773 million as of Monday, October 5.
State Street SPDR S&P 400 Mid Cap Value ETF, MDYV, which tracks the S&P MidCap 400 Value Index, charges 0.15% as of Monday, September 28. iShares Russell Mid-Cap Value ETF, IWS, which tracks the Russell Midcap Value Index, charges 0.23% in its July 31, 2026 summary prospectus.
Harbor Mid Cap Value ETF, EPMV, also picks undervalued mid-sized U.S. companies and has 60 holdings. It charges 0.88% and held $4.5 million as of Monday, October 5, 17 months after its May 1, 2025 listing.
HWMV’s 0.94% fee is the highest of these five ETFs
Thrivent converted its mid-cap value mutual fund into an ETF. Thrivent Mid Cap Value ETF, TMVE, held $285 million as of Monday, October 5.
The portfolio
The firm looks for 50 to 80 undervalued mid-sized companies, with an eye on sustainable cash flow and strong balance sheets, including businesses that may be out of favor or misunderstood. In normal markets at least 80% of the fund goes into mid-cap stocks that meet the adviser's own test of value. Mid-cap means companies comparable in size to the Russell Midcap Index.
As of Sunday, October 4, the portfolio held 72 positions, including a government money-market fund at about 2.8%, and the ten largest were 34% of it. IWS holds about 720 stocks, and the shared weight with HWMV was 7.3%. Energy was 16.3% of HWMV, 8.8 percentage points above that index fund.
Eleven days after the listing, the new class is still a thin market around the mutual fund's book, and its holders can be taxed for trades by mutual-fund shareholders.
ETFs in this story
Frequently asked questions
Did Hotchkis & Wiley convert the mutual fund into an ETF?
No, the firm listed an exchange-traded class of the fund, and the mutual fund remains a mutual fund.
How large is the HWMV class?
The ETF class held $491,000 as of October 4, equal to 20,000 shares, or one creation unit.
What does the ETF class charge?
The ETF class charges 0.94% a year, a 0.75% management fee and 0.19% in other expenses, with no distribution fee.
Can mutual-fund trades create taxes for ETF holders?
Holders of this class can face extra trading costs and taxable gains when mutual-fund shareholders buy or sell.
