Investors who seeking a mid-cap fund slightly tilted toward growth can examine assets like the iShares Russell Mid-Cap Growth ETF (IWP).
IWP seeks to track the investment results of the Russell Midcap Growth Index, which measures the performance of the mid-capitalization growth sector of the U.S. equity market. The fund generally invests at least 90% of its assets in securities of the underlying index and in depositary receipts representing securities of the underlying index.
The fund may invest the remainder of its assets in certain futures, options and swap contracts, cash and cash equivalents, as well as in securities not included in the underlying index, but which the advisor believes will help the fund track the underlying index. IWP investors get:
- Exposure to mid-sized U.S. companies whose earnings are expected to grow at an above-average rate relative to the market
- Targeted access to a specific category of mid-cap domestic stocks
- Use to tilt portfolios toward growth stocks
The fund’s 0.24% expense ratio is less than its categorical average of 0.46%.
Mid-Cap Stock ETFs Are Building Off of a Strong November
A vaccine rally and the presidential election in November set the stage for some nice gains in the mid-cap equity space. A Forbes article mentioned the following:
“The coronavirus pandemic, while better understood than it was at the beginning of the year, still presents significant uncertainty in terms of how it will impact society and the economy,” the article said. “Despite the long-term uncertainty, positive preliminary vaccine and antibody treatment news in November from major pharmaceutical companies led to a feeling of optimism among investors.”
“Small- and mid-cap stocks showed their potential in November with the S&P SmallCap 600 up 18%, while the S&P MidCap 400 rallied 14.1%,” the article added. “The S&P SmallCap 600 is up 1.3% year-to-date through November 30, while the S&P MidCap 400 is up 7.9%.”
The question now remains whether or not mid-caps can keep skewing towards the growth side of the equation in 2021. With a number of analysts forecasting a rebound, the future looks bright.
Higher corporate earnings could follow as the deployment of a vaccine starts to take effect in 2021. A recovering economy could feed into strength for growth in mid-caps and IWP.
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