If 2025 has an already narrative to watch, it’s the rise of small and midcap firms. Large caps delivered in 2024, performing well on the back of just a handful of tech firms. While a positive for investors, that reliance on just a few names does pose some notable concentration risk. That risk, and the potential positive impact of rate cuts for smaller firms, may be driving interest in small- and midcap offerings. A diverse space in its own right, clients looking to meet sustainability goals may find an ETF like MID compelling.
See more: The Standout Small-Cap Value ETF to Start 2025
MID, the American Century Mid Cap Growth Impact ETF, launched in 2020. The active midcap ETF charges 45 basis points (bps) to seek midcap firm that can help meet its capital appreciation goals. Its managers look for firms expected to increase in value, leaning on American Century’s fundamental research capabilities.
An Active Midcap ETF With a Twist
Intriguingly, the strategy also analyzes the United Nations Sustainable Development Goals (SDG) to help identify firms able to make a social or environmental impact in addition to providing a financial return per the ETF’s prospectus.
Those areas where firms can make an impact per the SDG include clean energy, infrastructure, and responsible consumption and production. The fund’s active approach can empower its managers to adapt to events and lean into high-conviction opportunities. That approach has helped the ETF return 19.4% over the last year ending December 31st, per American Century Investments.
With a growing number of younger investors looking for environmentally and socially-conscious strategies that can also perform, MID can stand out. Mid- and small-caps provide an exciting equities opportunity to start the year, and MID can play a part therein. For those advisors and investors looking to strike a balance and get upside, a midcap play like MID can appeal.
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