As investors look over their equity market exposure, investors may find that large-cap stock positions are too big for rapid growth and small-caps may expose them to more volatile short-term moves, but middle capitalization stocks and related ETFs may be just right. Middle capitalization stocks, or sometimes referred to as the market’s sweet spot, could help investors achieve improved risk-adjusted returns.
“REGL holds 44 stocks with over a quarter hailing from the financial services sector. The utilities and industrial sectors combine for nearly 29% of the fund’s weight. At the end of last year, REGL’s index had a dividend yield of 2.15%,” according to InvestorPlace.
REGL’s underlying index refines the mid-cap sweet spot by screening the benchmark S&P MidCap 400 for high-quality companies with at least 15 consecutive years of dividend growth and caps each sector at a maximum 30% to limit overexposure and equally weights holdings to ensure even greater diversification. Only 12% of the larger S&P mid-cap universe makes the cut and is included in the resulting portfolio of mid-cap dividend aristocrats.
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