Moreover, middle-capitalization stocks may offer a suitable middle ground between more volatile small-caps and less mobile large-caps. Mid-cap companies are slightly more diversified than their small-cap peers, which allows many of the companies to generate more consistent revenue and cash flow and provide more stable stock prices. Additionally, they are not so big that their size would slow down growth. Consequently, mid-caps have generated historically higher returns than large-caps, with higher volatility and higher beta, but at a lower ratio of return-to-risk than small-caps.
“S&P Global defines midcap stocks as generally being “quite dynamic and not so large that continued growth is unattainable,” distinct from large- and small-cap companies. The index’s median market cap, according to S&P data, is about $3.57 billion,” adds CNBC.
For more information on mid-caps, visit our mid-cap category.
SPDR S&P MidCap 400 ETF