The mid-cap segment of the market comprises the companies that find themselves in the middle of the business cycle. More specifically, these companies tend to have 澳洲幸运5官方开奖结果体彩网:market capitalizations between $2 billion and $10 billion, and they have grown beyond the typical types of risk that are associatꦡed with their smaller-cap counter parts.

From an investor's standpoint, the companies within this segment tend to be underfollowed despite relatively strong performance compared to other segments. In this article, we look at the sector composition of the mid-cap market by analyzing the key 澳洲幸运5官方开奖结果体彩网:benchmarks and 澳洲幸运5官方开奖结果体彩网:exchange-traded funds (ETFs) that track the performance of this group. ꧒After reading this article, investors can better understand the nuances between the different levels of sector exposure and how these details could affect long-term returns.

According to S&P Dow Jones Indices, the 澳洲幸运5官方开奖结果体彩网:S&P MidCap 400 has beaten the 澳洲幸运5官方开奖结果体彩网:S&P 500 and the 澳洲幸运5官方开奖结果体彩网:S&P 600 (for small-caps) by an annualized rate of 2.03% and 0.92%, respectively, between Dec. 30, 1994, and May 31, 2019. This type of strong performance often means that investors know that they want to gain exposure to mid-caps but don't know where to start. Luckily, there are many different ETFs available in the public market that track the mid-cap segment. The availability of many different mid-cap ETFs also means that there are many nuances across the funds. Some funds offer exposure to different styles and factors such as growth, value, or even niches such as moment✅um, while𒀰 others offer a diversified blend.

Within the funds that offer broader coverage, which tend to be the most popular based on total net assets, the differences tend to be even more subtle, with sector breakdowns varying by only a few percentage points. Depending on one's investment style, strategy, and perspective, these differences can affect long-term returns.  In the sections below, we will look at the subtleties between the sector breakdown of the most popular mid-cap indexes and mid-cap-focused ETFs so that investors get a sense of what sectors contribute to mid-cap performance.

S&P MidCap 400 Index

According to S&P Dow Jones Indices, as of March 31, 2022, the sector breakdown of the index tilted toward sectors such as industrials, financials, information technology, and consumer discretionary. The specific breakdo♕wn can be viewed in the list below. The heavier weighting toward sectors such as industri⛄als, financials, information technology, consumer discretionary, and healthcare is typical for the mid-cap segment and for the funds and indexes discussed throughout the article.

Investors who are interested in gaining exposure to mid-caps often tend to focus on these core sectors and then supplement with others such as real estate, materials, energy, utilities, and consumer staples. Some U.S.-based ETFs that are linked to the S&P MidCap 400 Index include the iShares Core S&P Mid-Cap ETF (IJH), the ProShares Ultra MidCap400 (MVV), the SPDR Portfolio S&P 400 Mid Cap ETF (SPMD), and the Vanguard S&P Mid-Cap 400 ETF (IVOO).

Sector breakdown of the S&P 400 Index

As of March 31, 2022:

Industrials: 18.7%
Financials: 14.2%
Information technology: 14.1%
Consumer discretionary: 14.0%
Real Estate: 10.1%
Healthcare: 9.2%
Materials: 7.4%
Consumer staples: 3.6%
Energy: 3.6%
Utilities: 3.4%
Communication services: 1.7%

CRSP U.S. Mid Cap Index

The CRSP U.S. Mid Cap Index targets the inclusion of the U.S. companies that fall between 70% and 85% of investable market capitalization. The most popular mid-cap ETF that tracks the CRSP U.S. Mid Cap Index is the Vanguard Mid-Cap ETF (VO), which we will look at more closely below. As you wil𝓀l see in the sector breakdown, th༒e CRSP U.S. Mid Cap Index has slightly higher exposure to technology, healthcare, telecommunications.

Sector breakdown of the CRSP U.S. Mid Cap Index

As of March 31, 2022:

Information technology: 16.39%
Industrials: 14.22%
Consumer discretionary: 13.76%
Financials: 11.59%
Healthcare: 11.03%
Real estate: 9.69%
Energy: 6.41%
Utilities: 6.40%
Consumer staples: 4.71%
Basic materials: 3.85%
Telecommunications: 1.95%

iShares Core S&P Mid-Cap ETF

As of April 14, 2022, the iShares Core S&P Mid-Cap ETF (IJH) was the largest mid-cap ETF with total net assets of $64.5 billion. The fund tracks the S&P MidCap 400 Index and as a result has strong exposure to sectors such as industrials, financials, consumer discretionary, information technology, and healthcare. The fund carries an 澳洲幸运5官方开奖结果体彩网:expense ratio of 0.05% and had 403 holdings excluding its cash positions and 澳洲幸运5官方开奖结果体彩网:derivatives such as futures and currency futures.

Sꦰector breakdown of the iShares Core S&P Mid-Cap ETF

As of April 13, 2022:

Industrials: 18.19%
Consumer discretionary: 14.20%
Financials: 13.99%
Information technology: 13.70%
Healthcare: 9.41%
Real estate: 9.41%
Materials: 7.69%
Energy: 4.14%
Consumer staples: 3.75%
Utilities: 3.46%
Communication: 1.75%
Cash and/or derivatives: 0.31%

Vanguard Mid-Cap ETF

With total net assets of approximately $53.2 billion as of April 14, 2022, the Vanguard Mid-Cap ETF (VO) is the second-largest mid-cap ETF in the U.S. market. The fund comprises 370 holdings and tracks the performance of the CRSP U.S. Mღid Cap Index.

Sector breakdown of the Vanguard Mid-Cap ETF

As of Feb. 28, 2022:

Information technology: 16.80%
Industrials: 14.40%
Consumer discretionary: 14.30%
Financials: 12.00%
Healthcare: 11.10%
Real estate: 9.30%
Energy: 6.00%
Utilities: 6.00%
Consumer staples: 4.50%
Basic materials: 3.60%
Telecommunications: 2.00%

iShares Russell Mid-Cap ETF

The iShares Russell Mid-Cap ETF (IWR) has net assets of nearly $30 billion as of April 14, 2022, and tracks the performance of the Russell MidCap Index. The fund has an expense ratio of 0.19% and comprises 824 holdings. The relatively large number of ho꧟ldings provides investors with a broader picture of the mid-cap market segment than the other ETFs in the category. Based on the sector breakdown shown in the list below, you’ll find that the breakdown is very similar to the others given its concentration of sectors such as information technology, industrials, financials, healthcare, and consumer discretionary.

Sector breakdown of th𝓡e iShares Russell Mid-Cap ETF

As of April 13, 2022:

Information technology: 17.29%
Industrials: 14.03%
Financials: 12.49%
Consumer discretionary: 11.34%
Health care: 10.93%
Real estate: 8.55%
Materials: 6.19%
Energy: 5.90%
Utilities: 5.37%
Consumer staples: 3.98%
Communication: 3.79%
Cash and/or derivatives: 0.13%

SPDR® S&P MIDCAP 400® ETF Trust

As the name of the ETF suggests, the SPDR® S&P MIDCAP 400® ETF Trust (MDY) tracks the S&P 400 Index. The fund has approximately $19.6 billion in 澳洲幸运5官方开奖结果体彩网:assets under management (AUM) ওas of April 13, 2022, and carries a gross expense ratio of 0.23%. The fund comprises 400 holdings with a weighted average market cap of $7.2 billion.൩

S🤡ector breakdown of the SPDR® S&P MIDCAP 400® ETF Trust

As of April 13, 2022:

Industrials: 18.26%
Consumer discretionary: 14.24%
Financials: 14.03%
Information technology: 13.74%
Health care: 9.44%
Real estate: 9.44%
Materials: 7.71%
Energy: 4.15%
Consumer staples: 3.76%
Utilities: 3.47%
Communication services: 1.75%

Vanguard Mid-Cap Value ETF

Each of the ETFs mentioned this article so far have been composed of a blend of different types of 澳洲幸运5官方开奖结果体彩网:mid-cap companies. The Vanguard Mid-Cap Value ETF (VOE) is geared toward investors who intend to filter down the segment through the lens of a 澳洲幸运5官方开奖结果体彩网:value investor. Fundamentally, the fund comprises 204 hold♒ings and has total net assets of $30.2 billion as of March 31, 2𓃲022. Based on the sector weights shown in the list below, you'll find that mid-cap value investors are drawn toward financials, consumer discretionary, and real estate more so than those interested in the other funds.

Sector breakꦏdown of the Vanguard Mid-Cap Value ETF

As of Feb. 28, 2022:

Financials: 17.27%
Consumer discretionary: 14.64%
Real estate: 12.21%
Industrials: 11.63%
Utilities: 10.67%
Consumer staples: 7.57%
Energy: 7.02%
Healthcare: 5.80%
Basic materials: 5.76%
Technology: 5.65%
Telecommunications: 1.78%

The Bottom Line

Investors have many options to choose from when it comes to mid-cap ETFs. There are some subtle differences between the sector exposure among the various funds, which will affect long-term returns and overall portfolio diversification and could influence what type of fun💦d might be best for a given portfolio. When analyzing the sector breakdown of the mid-cap segment, it is apparent that the bulk of the concentration goes to industrials, information technology, consumer discretionary, finan﷽cials, and healthcare.