Middle-capitalization stocks are outperforming this year, and investors can also target the mid-cap segment through related exchange traded funds.
Mid-cap companies are slightly more diversified than their small-cap peers, which allows many mid-sized companies to generate more consistent revenue and cash flow and provide more stable stock prices. Additionally, they are not so big that their size would slow down growth.
The mid-caps segment has also outperformed their large-cap peers, but with lower volatility than small caps. Moreover, the returns of mid-cap stocks have also beaten those of small-cap stocks during the trailing three-, five-, and 10-year periods, with lower volatility.
Related: An Attractive Mid-Cap Value ETF Play
Well-known mid-cap ETFs include the iShares Core S&P Mid-Cap ETF (NYSEArca: IJH), SPDR S&P MidCap 400 ETF (NYSEArca: MDY) and the Vanguard Mid-Cap ETF (NYSEArca: VO), among others.
“Being smack in the middle can be hard. And maybe when it comes to stocks in the middle, the S&P 400 midcap index doesn’t get as much attention as its large- and small-cap counterparts, the S&P 500 and the Russell 2000,” reports CNBC. “But on Tuesday, the midcap index hit an all-time high, having already seen a 13 percent rise this year, and could see further upside due to several fundamental and technical forces.”
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