Small- and Mid-Cap ETFs Light Up Investors


EQWS takes an equal-weight position on the Russell 2000. Compared to the benchmark Russell 2000, the equal-weight methodology has a much lower financial tilt at 10.9% and smaller information technology position at 13.3%. The indexing methodology also makes the fund overweight micro-caps at 62.7% of the portfolio.

SCHA tracks the Dow Jones U.S. Small-Cap Total Stock Market Index, which also includes some mid-cap and fewer micro-cap stocks than in the Russell 2000. The Schwab offering is also the cheapest on the block, with a 0.08% expense ratio.

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Additionally, the Guggenheim Mid-Cap Core ETF (NYSEArca: CZA) and ProShares S&P MidCap 400 Dividend Aristocrats ETF (NYSEArca: REGL) are among the best performing mid-cap ETFs this quarter, rising 4.5% and 3.1%, respectively.

CZA tries to reflect the performance of the Zacks Mid-Cap Core Index, which targets companies with superior risk-return profiles as determiner by Zacks Investment Research. However, due to its indexing methodology, the fund is more focused that the benchmark S&P MidCap 400. For instance, St. Jude Medical (NYSE: STJ) makes up 2.7% of CZA’s portfolio, and the ETF includes a hefty 32.8% tilt toward financials and 17.1% to industrials. Moreover, CZA includes a 11.6% position in large-cap names.

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REGL tracks the S&P MidCap Dividend Aristocrats Index, which only includes a targeted 46 dividend paying companies that have raised payouts for 15 consecutive years. The indexing methodology makes the tilt toward the value style and quality names. The ETF also comes with a slightly more attractive 1.54% 12-month yield.

For more information on mid-caps, visit our mid-cap category.