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.
JHMM was one of a small number of ETFs to hit record highs on Wednesday, bringing its year-to-date gain to just over 7%. The ETF, which debuted in September 2015, now has over $170 million in assets under management.
Middle-capitalization stocks may offer a suitable middle ground between more volatile small-caps and less mobile large-caps. Mid-cap companies are slightly more diversified than their small-cap peers, which allows many of the 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. Consequently, mid-caps have generated historically higher returns than large-caps, with higher volatility and higher beta, but at a lower ratio of return-to-risk than small-caps.
JHMM allocates 34% of its combined weight to technology and industrial stocks while the financial services and consumer discretionary sectors combine for 29% of the ETF’s weight. None of JHMM’s 678 holdings command weights of over 0.55%. The weighted average market value those holdings is just under $10.7 billion.
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