Investors typically drift toward large-cap stocks in search of dividends, but some exchange traded funds prove other parts of the equity market are viable income-generating ideas, too. For mid-cap dividend hunters, the ProShares S&P MidCap 400 Dividend Aristocrats ETF (CBOE: REGL) is an ideal ETF to consider.
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 uses a strategy featured on some popular large-cap dividend ETFs: a focus on dividend increase streaks. This mid-cap dividend ETF tracks the S&P MidCap 400 Dividend Aristocrats Index, which is the dividend aristocrats offshoot of the S&P MidCap 400. REGL’s index requires member firms to have raised payouts for at least 15 consecutive years,” reports InvestorPlace.
The mid-cap category has also outperformed their larger 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.