A State Street Global Advisors (SSGA) Report noted the resilience of mid-cap stocks, especially during market downturns, defying conventional wisdom that large-cap stocks can better mitigate the effects of a sell-off.
âAmid the current COVID-19 crisis, market fluctuations caused by the pandemic have created an opportunity for investors to reposition their portfolios,â said SSGA. “Conventional wisdom says that large cap stocks are more resistant to market downturns and small cap stocks lead to a rally, but our research may surprise you.”
“Our analysis revealed that during periods of systemic risk since the mid-1990s, contrary to popular belief, large caps have not fallen the least and small caps have not led a recovery,” added SSGA. . “Instead, mid caps have historically performed best and have been resilient during these times.”
As such, there is a value component to be had in mid caps during a downturn as well as a growth component during an economic upturn. That said, Invesco offers two ETF options, whether an investor is for value, growth, or both.
Mid-cap value or growth options
For the strong believer in value, ETF investors can opt for the Invesco S&P MidCap 400 Pure Value ETF (RFV). The fund seeks to replicate the investment results of the S&P MidCap 400Â® Pure Value Index, which is made up of a subset of securities of the S&P MidCap 400Â® Index with strong value characteristics.
“This ETF is one of many options available to investors seeking access to mid-cap US stocks with value characteristics, such as high dividend yields and low price multiples,” noted an analysis of the ETF database. “As such, RFV can be a useful tool for those looking to implement a tactical tilt toward a sector of the US stock market that can perform relatively well in certain economic environments.”
For a growth-oriented option, there is the Invesco S&P MidCap 400 Pure Growth ETF (MER), who seeks to replicate the investment results of the S&P MidCap 400Â® Pure Growth Index. The underlying index is made up of a subset of securities from the S&P MidCap 400Â® Index that exhibit strong growth characteristics.
“This AND F is one of the many options available to investors seeking access to mid-cap US stocks with growth characteristics, such as low dividend yields and high price multiples, âsaid an analysis of the database. AND F. ” As such, RFG can be a useful tool for those looking to implement a tactical tilt towards a sector of the US stock market that can perform relatively well in certain economic environments. “
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.