Mid-cap stocks and exchange traded funds can get overlooked, as they get pegged between large and small-cap headlines. A mid-cap focused ETF can play an important role in a portfolio, giving investors balanced exposure once an investor has looked into the holdings.

Yesterday we looked at small-cap funds, but today let’s move up the capitalization spectrum. [Small-Cap ETFs]

SPDR S&P Mid-cap 500 (NYSEArca: MDY) and the Vanguard Mid-Cap ETF (NYSEArca: VOhave not been able to outperform large-caps for over a year now, but the performance of the funds is worthy of any portfolio. MDY has gained 9.6% year-to-date and VO has gained 8.9% to date.

“One of the most prominent differences in these two ETFs’ holdings is the breakdown in the size of the constituent companies – both are billed as mid-cap plays, but VO has a greater slant towards larger-cap companies, with a weighted average market cap of $7.2 billion among its holdings, compared to a significantly lower $3.9 billion for MDY,” S&P said in the note. [Using ETFs to Build a Diversified Portfolio]

According to S&P Capital IQ, the reason for MDY’s outperformance to VO can be attributed to MDY’s exposure to the financial and health care sectors, which both give a dividend yield. [ETF Chart of the Day: U.S. Mid-Cap Funds]

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