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A Solid, Low-Cost Choice for Mid-Cap Investors

Gold-rated iShares Core S&P Mid-Cap provides exposure to a slice of the market that has historically outperformed on a risk-adjusted basis.


Ben Johnson: Mid-cap stocks have been in the sweet spot with respect to their risk-adjusted performance since 1926. Although they have historically had a higher return than large caps, they have also had a higher volatility and a higher beta, or more procyclical movement with the market. But the higher return has compensated investors for taking this increased risk. While small caps had even higher returns, mid-caps have had a slightly better ratio of return to risk. For this reason, many investors choose to give an overweighting to mid-cap stocks. Yet, there is no guarantee their past outperformance will persist.

IShares Core S&P Mid-Cap ETF (IJH) offers diversified exposure to U.S. mid-cap stocks. A low fee and a soundly constructed and reasonably representative benchmark give this ETF a great position to continue its long streak of producing superior risk-adjusted returns relative to its category peers over the long haul and underpin its Morningstar Analyst Rating of Gold.

Ben Johnson has a position in the following securities mentioned above: IJH. Find out about Morningstar’s editorial policies.