Mid cap exposure can give investors the downside protection of large caps with the growth potential of small caps. ETF investors seeking a mid cap fund with a value tilt can check out the Vanguard Mid-Cap Value Index Fund ETF Shares (VOE).
VOE seeks to track the performance of the CRSP US Mid Cap Value Index that measures the investment return of mid-capitalization value stocks. The fund employs an indexing investment approach designed to track the performance of the CRSP US Mid Cap Value Index, a broadly diversified index of value stocks of mid-size U.S. companies.
The advisor attempts to replicate the target index by investing all, or substantially all, of its assets in the stocks that make up the index, holding each stock in approximately the same proportion as its weighting in the index. VOE comes with a low expense ratio of 0.07% in an already-low 0.18% category average.
Value strategies often come with biases toward specific sectors, and may outperform more broadly-based indexes in certain economic environments such as recessions. Overall, VOE:
- Seeks to track the performance of the CRSP US Mid Cap Value Index, which measures the investment return of mid-capitalization value stocks.
- Provides a convenient way to match the performance of a diversified group of mid-size value companies.
- Follows a passively managed, full-replication approach.
- Has posted strong performance, with the fund up about 24% the last six months.
Mid Caps Striking the Perfect Balance?
Investors looking at large cap stock positions may want more aggressive returns without all the volatility. Mid caps strike this perfect balance of performance, diversity, and safety.
“This is what we are looking at now because after this sort of a runup, a lot of the quality midcaps and largecaps have become quite expensive,” said Neeraj Dewan, Director, Quantum Securities. “The next leg has to be in the mid and small caps where movements have started and from the lows of March, stocks have become 2X, 3X, 4X. So a lot of movement has happened there also.”
Mid caps have been in pole position over the last six months. The MSCI ACWI Mid Cap index is up over 7% higher than the MSCI ACWI Large Cap index within the last half year.
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