Smaller stocks, including mid-caps, are often associated with growth, not income. However, some exchange traded funds offer investors avenues to mid-cap income, including the ProShares S&P MidCap 400 Dividend Aristocrats ETF (CBOE: REGL).
REGL provides access to quality dividend growers in the mid-cap category. REGL tracks a mid-cap Dividend Aristocrats Index, which requires 15 consecutive years of increased dividends for inclusion. This ProShares fund is the only ETF to focus on members of the S&P MidCap 400 Index that have boosted payouts for at least 15 years.
Mid-cap companies are slightly more diversified than their small-cap peers, which allows many mid-sized 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.
The mid-caps segment has also outperformed their large-cap peers, but with lower volatility than small caps. Moreover, the returns of mid-cap stocks have also beaten those of small-cap stocks during the trailing three-, five-, and 10-year periods, with lower volatility.
REGL holds 44 stocks with a weighted average market value of $5.62 billion, according to issuer data. The ETF celebrates its third anniversary in February, an important milestone because many investors look to evaluate a fund’s three-year track record before investing.