Exploring The Top Mid-Cap Exchange-Traded Funds

Oct 30, 2022 By Triston Martin

Net assets, which indicates the total amount of money invested in an ETF, is a valuable metric for investors to analyze the relative popularity of different ETFs. ETFs with a few million dollars invested in them are not widely used and sometimes challenging to trade.

However, institutional investors sometimes own ETFs with millions of dollars invested, giving them more security.

This piece examines the most valuable exchange-traded funds (ETFs) that specialize in mid-cap equities in descending order of their net assets. This article will also compare and contrast the fundamental aspects of these mid-cap ETFs, such as expense ratios and holdings.

What Exactly Are Mid-Cap Stocks?

Mid-cap stocks have market caps between $2 billion and $10 billion. They have a proven track record and a dominant position in their respective sectors, but unlike large-cap stocks, they can sustain growth as they increase their market share. There has been a recent trend of large-cap corporations acquiring or merging with mid-cap firms.

Former large-cap firms that have seen their market share and overall importance decrease also fall into this group. Investments in mid-sized firms are safer than those in small- or large-caps, but they also tend to be less volatile and provide less room for development.

Core S&P Mid-Cap ETF

The iShares Core S&P Mid-Cap ETF is the largest publicly listed ETF focused on the mid-cap market, with net assets of $63.5 billion. The fund's management is committed to offering investors a low-cost and tax-efficient way to obtain exposure to U.S. mid-cap firms.

The fund consists of 403 investments and has an expense ratio of 0.05%. This investment's dividend yield for the past year is 1.26 per cent. Looking at its top five holdings, you can see that this product has a somewhat higher exposure to industrials and materials than other mid-cap-focused funds.

Mid-Cap ETF from Vanguard

The Vanguard Mid-Cap ETF (VO) is slightly cheaper than the IJH above ETF, with net assets of $53.2 billion and an expense ratio of 0.04%. Again, the goal of the fund is to give investors access to mid-sized companies in the United States at a reasonable cost. The VO ETF has a full-replicating approach that is passively managed to reduce the tracking error relative to its CRSP U.S. Mid Cap Index benchmark.

The iShares Russell Mid-Cap ETF

Another ETF that aims to expose American investors to the mid-cap market is the iShares Russell Mid-Cap ETF (IWR). The fund's fee ratio of 0.19% is greater than that of similar exchange-traded funds (ETFs), but it also offers a more comprehensive perspective of the market sector because of its 824 holdings. The fund's total net assets are $29.9 billion, with a dividend yield of 1.14% based on the last 12 months.

Exchange Traded Fund SPDR S&P MidCap 400

The SPDR S&P MidCap 400 ETF is a similar product to the iShares Core S&P Mid-Cap ETF in that it aims to replicate the underlying performance of the S&P MidCap 400 Index.

The fund's core 400 investments have a nearly equal sector allocation as IJH. There is a more significant expenditure ratio of 0.23% for MDY, which has net assets of $19.49 billion.

Mid-Cap Value ETF

The Vanguard Mid-Cap Value ETF, with $16.3 billion in assets, is a popular that aims to give investors exposure to the U.S. mid-cap equities market from a value investor's perspective. This means that the fund's management will seek to add holdings in companies trading at reasonable multiples of their underlying fundamentals.

The fund's cost ratio is at 0.07%, and its dividend yield is 2.02%, both of which are above average for mid-cap ETFs. By looking at its top five holdings, you can see that the fund is slightly more concentrated on basic materials than the funds above.

Why Do Some Large-Cap Companies Appear in a Mid-Cap ETF?

A large cap's standard definition is a corporation with a market valuation of $10 billion or more. Mid-cap ETFs may contain large-cap firms if such companies matched the original criteria for inclusion in the fund as mid-caps and continue to exhibit those qualities today. Due to their recent success, however, several of these investments may now qualify as large caps.

Conclusion

Those above low-cost, focused ETFs are frequently used by investors seeking exposure to the mid-cap portion of the market. These funds have the most significant net assets as of April 2022.

However, this may change. When selecting a mid-cap ETF for a diversified portfolio, it is essential to keep in mind that the holdings may change significantly based on the underlying benchmark that the fund's management is attempting to monitor.

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