Many investors overlook mid-caps when it comes to their
investing decisions. These securities are considered too big and
safe for those seeking volatile small cap exposure, while they
are often considered too risky and uncertain for those who want
the stability of mega caps.
Thanks to being in this no man's land, mid cap
ETFs
are often less popular than their small or large cap cousins
which have managed to establish a stronger asset base. However,
this has clearly been to investors' detriment as of late, as mid
cap ETFs have been soaring higher, and are arguably leading the
market in 2013 (see
Mid Cap ETF Investing 101
).
These middle of road securities, as represented by the
benchmark S&P 400 Midcap Index, are now at all-time highs,
something that cannot be said for other, more popular indexes
like the DJIA, Nasdaq-100, or even the S&P 500. While it is
true that small caps have also been soaring and are approaching
their all-time highs as well, mid caps could arguably be a better
play in today's environment, as they are safer and could be
better positioned if more political issues creep into the
picture.
With this trend in mind, investors may want to consider
cycling into mid caps at this time, in order to obtain a nice
momentum play as we go further into 2013. Fortunately for those
who want some broad exposure to this segment, there are a
host of quality ETF options available, a few of which we have
highlighted below for those who want to take a closer look at
this often overlooked, but surging, corner of the market:
Broad Mid Cap ETFs
Most of the ETFs fall into this category and account for the
vast amount of assets in the space. These including the following
ETFs, among others:
-
iShares Core S&P Mid-Cap ETF (
IJH
)
-
SPDR S&P MidCap 400 ETF (
MDY
)
-
iShares Russell Midcap Index Fund (
IWR
)
-
Vanguard Midcap Index Fund (
VO
)
Style ETFs in the Mid Cap space
Mid caps also offer up options in the 'style' world, giving
access to value and growth stocks in this market cap level (read
Focus on Earnings with These ETFs
). Growth stocks are generally higher beta stocks that have
better growth prospects, while value are less volatile and
usually have higher yields on average. Some options in this space
include:
-
iShares Russell Midcap Value Index Fund (
IWS
)
-
iShares S&P MidCap Value ETF 400 Value (
IJJ
)
-
Vanguard Mid-Cap Value ETF (
VOE
)
-
iShares Russell Midcap Growth Index Fund (
IWP
)
-
iShares S&P MidCap 400 Growth (
IJK
)
-
Vanguard Mid-Cap Growth (
VOT
)
More Exotic Mid Cap ETFs
If bifurcating mid caps into growth and value doesn't appeal
to you, there are still other options that can provide excellent
exposure to the mid cap space with a potentially more unique
approach (see
11 Great Dividend ETFs
). These ETFs tend to cost a bit more than their more
'traditional' cousins, but they can potentially offer up a better
exposure profile:
-
WisdomTree MidCap Dividend ETF (
DON
)
-
First Trust MidCap Core AlphaDEX Fund (
FNX
)
-
WisdomTree MidCap Earnings ETF (
EZM
)
This list above only begins to scratch the surface of all the
mid cap ETF options that are available to investors. No matter
though, as any of these picks should be able to play off the
market cap level's solid momentum and could make for interesting
picks for investors who have more or less forgotten about the
space until now.
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ISHARS-SP MID (IJH): ETF Research Reports
ISHARS-SP MC VL (IJJ): ETF Research Reports
ISHARS-SP MC GR (IJK): ETF Research Reports
ISHARS-RS M GR (IWP): ETF Research Reports
ISHARS-RS M IDX (IWR): ETF Research Reports
ISHARS-RS M VL (IWS): ETF Research Reports
SPDR-SP MC 400 (MDY): ETF Research Reports
VIPERS-MID CAP (VO): ETF Research Reports
VANGD-MC VALUE (VOE): ETF Research Reports
VANGD-MC GROWTH (VOT): ETF Research Reports
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