Mid-cap ETFs have recently topped their 2007 highs, a great milestone, considering that not every sector or asset class has managed that feat yet.
Mid-caps straddle a line between large- and small-caps: they’re more established than many small-caps, so growth isn’t quite as rapid, but they’re younger than large-caps, leaving them some upside room.
Despite their high valuations, small-caps is still an integral part of a well-balanced portfolio. Andrew Braun, co-manager of the Goldman Sachs Mid Cap Value Fund, said that small- and mid-caps are continue to provide opportunities as revenues grow and margins expand.
Quincy Krosby, an economist at Prudential Financial, though, argues that small-cap and mid-cap stocks are in a good position for mergers and buyouts from cash-bloated large-cap companies.
- Direxion Daily Mid Cap Bull 3x Shares (NYSEArca: MWJ): Feeling bullish on mid-cap prospects? This fund aims to deliver 300% of the movement of the Russell Midcap Index.
- Vanguard Mid-Cap Growth ETF (NYSEArca: VOT): If you’re more in the mood to play it straight, VOT charges a 0.14% expense ratio and gives exposure to 242 mid-cap corporations in the United States.
- iShares Russell 2000 (NYSEArca: IWM): If the S&P 500 is the grandaddy of large-caps, then the Russell 2000 is the definitive small-cap index. This ETF tracks the 2,000 smallest companies that make up the Russell 3000.
- Vanguard Small-Cap Growth ETF (NYSEArca: VBK): VBK is the top-performing small-cap ETF over the last six months or so, gaining close to 30%. With an expense ratio of 0.14%, it tracks the MSCI U.S. Small-Cap Growth Index and has 1,000 components.
Max Chen contributed to this article.