When we listen to the news, we mostly hear about large, brand-name companies. However, mid-sized companies and related exchange traded funds (ETFs) have shown some decent gains as the economy rights itself.
According to Will McClatchy for ETFZone, overweighting or underweighting mid-caps coming out of a bear market can be a good play for an ETF portfolio, depending on the economic conditions, and mid-caps are relatively less volatile than small-caps.
There is also the chance that a larger company may acquire a mid-cap company, which would be to the benefit of mid-cap shareholders.
Stock-picking can be difficult; how does anyone know which small- or mid-cap will graduate to large-cap status? Mid-cap ETFs can give you a diversified play on the entire asset class.