The Lengthy Out-Performance of Mid-Cap ETFs

On size alone, it is impossible to say mid-cap exchange traded funds are overlooked. The iShares Core S&P Mid-Cap ETF (NYSEArca: IJH) and the SPDR Mid-Cap 400 (NYSEArca: MDY), home to $20.4 billion and $15.8 billion in assets under management, respectively, are two of the 21 largest U.S. ETFs.

What is often glossed over is the out-performance offered by mid-cap ETFs relative to some benchmark indices, such as the S&P 500.

Over the past couple of years, the S&P 400 has continued to trend strongly to the upside. In fact, the S&P 400 has gained over 230% since its financial crisis lows and remains well within the confines of a steep upward sloping trend channel,” according to Chart of the Day.

Over the past two years, mid-cap ETFs have really flexed their muscles. The Vanguard Mid-Cap ETF (NYSEArca: VO) and the Schwab US Mid-Cap ETF (NYSEArca: SCHM) are each up about 40%, performances that are well ahead of the S&P 500 over the same time period. Neither index tracks the S&P 500 MidCap Index, but both are liquid, low-cost avenues for investors looking for mid-cap exposure. [Mid-Cap ETFs Find Sweet Spot]

SCHM, which debuted in January 2011, charges just 0.07% per year and is now a $1 billion ETF. VO charges 0.1% per year.