Mid-Cap ETFs invest in stocks of companies that are believed to have a medium market capitalization size, generally between $2 and $10 billion. As the name suggests, these ETFs are composed of companies that lie between large cap stocks and small caps stocks.
The attractive aspect of mid-cap stocks, and therefore mid-cap ETFs, is that they are anticipated to grow and increase profits, market share and productivity, placing them in the middle of their growth curve. Since they are still expected to be in a robust growth stage however, they are deemed to be less risky than small-caps, but more risky than large-caps. Here are the 10 best Mid-Cap ETFs for 2019:
1. Invesco Russell MidCap Pure Growth ETF (PXMG)
The Invesco Russell MidCap Pure Growth ETF (the “Fund”) is based on the Russell Midcap® Pure Growth Index (the “Index”). The Fund will invest at least 90% of its total assets in the component securities that comprise the Index. The Index is composed of securities with strong growth characteristics selected from the Russell Midcap® Index. Securities are weighted based on their style score. The Fund and the Index are rebalanced and reconstituted annually. The expense ratio for this ETF is 0.39%
2. iShares Morningstar Mid-Cap Growth ETF (JKH)
The iShares Morningstar Mid-Cap Growth ETF seeks to track the investment results of an index composed of mid-capitalization U.S. equities that exhibit growth characteristics. Investor gain exposure to mid-sized U.S. companies whose earnings are expected to grow at an above-average rate relative to the market. The ETF allows targeted access to a specific category of mid-cap domestic stocks, which investors can use it to tilt their portfolio towards growth stocks. The expense ratio is 0.30%.
3. NuShares ESG Mid-Cap Growth ETF (NUMG)
The fund employs a passive management (or “indexing”) approach, investing primarily in mid-capitalization U.S. equity securities that exhibit overall growth style characteristics and that satisfy certain environmental, social and governance (“ESG”) criteria. The fund seeks to track the investments results, before fees and expenses, of the TIAA ESG USA Mid-Cap Growth Index, which is primarily composed of equity securities issued by mid- capitalization companies listed on U.S. exchanges. The Index uses a rules-based methodology that seeks to provide investment exposure that generally replicates that of mid-cap growth benchmarks through a portfolio of securities that adhere to predetermined ESG, controversial business involvement and low-carbon screening criteria. The Index is rebalanced on a quarterly basis. The expense ratio is 0.40%.
4. First Trust Mid-Cap Growth AlphaDEX Fund (FNY)
The First Trust Mid Cap Growth AlphaDEX® Fund is an exchange-traded fund whose investment objective is to seek investment results that correspond generally to the price and yield, before the Fund’s fees and expenses, of an equity index called the NASDAQ AlphaDEX® Mid Cap Growth Index. The NASDAQ AlphaDEX® Mid Cap Growth Index is an “enhanced” index created and administered by Nasdaq, Inc. (“Nasdaq”) which employs the AlphaDEX® stock selection methodology to select stocks from the NASDAQ US 600 Mid Cap Growth Index that meet certain criteria. Nasdaq constructs the NASDAQ AlphaDEX® Mid Cap Growth Index by ranking the eligible stocks from the NASDAQ US 600 Mid Cap Index on growth factors including 3-, 6- and 12- month price appreciation, sales to price and one year sales growth, and separately on value factors including book value to price, cash flow to price and return on assets.
All stocks are ranked on the sum of ranks for the growth factors and, separately, all stocks are ranked on the sum of ranks for the value factors. A stock must have data for all growth and/or value factors to receive a rank for that style. Each stock receives either its growth or value score as its selection score based on its style designation as determined by Nasdaq. The top 225 stocks based on the selection score determined in the previous step comprise the “selected stocks”. The selected stocks are divided into quintiles based on their rankings and the top ranked quintiles receive a higher weight within the index. The stocks are equally-weighted within each quintile. The index is reconstituted and rebalanced quarterly. The expense ratio is quite high at 0.70%.
5. iShares Russell Midcap Growth ETF (IWP)
The iShares Russell Mid-Cap Growth ETF seeks to track the investment results of an index composed of mid-capitalization U.S. equities that exhibit growth characteristics. The ETF offers exposure to mid-sized U.S. companies whose earnings are expected to grow at an above-average rate relative to the market. Like its sibling, it provides investors targeted access to a specific category of mid-cap domestic stocks, which investors can use it to tilt their portfolio towards growth stocks. The expense ratio is low at 0.25%.
6. Vanguard Mid-Cap Growth ETF (VOT)
The Vanguard Mid-Cap Growth ETF seeks to track the performance of the CRSP US Mid Cap Growth Index, which measures the investment return of mid-capitalization growth stocks. The ETF provides a convenient way to match the performance of a diversified group of midsize growth companies. The fund follows a passively managed, full-replication approach, making its expense ratio quite modest at 0.07%.
7. Invesco S&P MidCap 400 Pure Value ETF (RFV)
The Invesco S&P MidCap 400® Pure Value ETF (Fund) is based on the S&P MidCap 400®Pure Value Index (Index). The Fund will invest at least 90% of its total assets in securities that comprise the Index. The Index measures the performance of securities that exhibit strong value characteristics in the S&P MidCap 400® Index. Value is measured by the following risk factors: book value-to-price ratio, earnings-to-price ratio and sales-to-price ratio. The Fund and the Index are rebalanced annually. The total expense ratio is 0.35%.
8. iShares Morningstar Mid-Cap ETF (JKG)
The iShares Morningstar Mid-Cap ETF seeks to track the investment results of an index composed of mid-capitalization U.S. equities. It offers exposure to mid-sized U.S. companies, providing access to a specific segment of the domestic stock market. Investors can use the fund to seek long-term growth in their portfolios. The expense ratio is siimilar to its sibling at 0.25%.
9. Vanguard Mid-Cap Index ETF (VO)
The Vanguard Mid-Cap Index ETF aims to track the performance of the CRSP US Mid Cap Index, which measures the investment return of mid-capitalization stocks. The ETF offers a convenient way to match the performance of a diversified group of medium-size companies. It follows a passively managed, full-replication approach, keeping expenses extremely low at just 0.04%.
10. iShares Russell Midcap ETF (IWR)
The iShares Russell Mid-Cap ETF seeks to track the investment results of an index composed of mid-capitalization U.S. equities. The ETF offers exposure to mid-sized U.S. companies whose earnings are expected to grow at an above-average rate relative to the market. Like its sibling, it provides investors targeted access to a specific category of mid-cap domestic stocks. The expense ratio is 0.19%.
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