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TheStreet Open House

Top 10 Mid-Cap ETFs

Stocks in this article: EMM RWK SCHM JKG FNX

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( ETF Digest) -- There are more than 40 ETFs in the category including growth, value and blend. We're going to focus on blended issues which intuitively would be the most usable for most investors.  

ETFs selected are based on indices tied to well-known index providers including Russell, S&P, Barclays, MSCI, Dow Jones and so forth.

Uniquely, investors should remember, mid-cap issues may carry a higher beta (volatility or higher risk levels) than their large cap peers. This means during times of higher economic growth combined with accommodative Fed monetary policies and bullish market conditions returns in these two sectors should outperform. But, the opposite can occur when these conditions reverse.

Remaining aware of these benefits and risks should be important to every investor. Further given bullish conditions it sometimes becomes difficult to ascertain and distinguish between small-, mid- and large-cap sectors. One thing you'll note with charts posted is the similarities in trends and performance. This isn't a coincidence given overall index constituent similarities from one to another.

We rank the top 10 ETF by our proprietary stars system as outlined below. However, given that we're sorting these by both short and intermediate issues we have split the rankings as we move from one classification to another.


Strong established linked index
Excellent consistent performance and index tracking
Low fee structure
Strong portfolio suitability
Excellent liquidity


Established linked index even if "enhanced"
Good performance or more volatile if "enhanced" index
Average to higher fee structure
Good portfolio suitability or more active management if "enhanced" index
Decent liquidity


Enhanced or seasoned index
Less consistent performance and more volatile
Fees higher than average
Portfolio suitability would need more active trading
Average to below average liquidity


Index is new
Issue is new and needs seasoning
Fees are high
Portfolio suitability also needs seasoning
Liquidity below average

We feature a technical view of conditions from monthly chart views. Simplistically, we recommend longer-term investors stay on the right side of the 12 month simple moving average. When prices are above the moving average, stay long, and when below remain in cash or short. Some more interested in a fundamental approach may not care so much about technical issues preferring instead to buy when prices are perceived as low and sell for other reasons when high; but, this is not our approach.

Premium members to the ETF Digest receive added signals when markets become extended such as DeMark triggers to exit overbought/oversold conditions.

For traders and investors wishing to hedge, leveraged and inverse issues are available to utilize from ProShares and Direxion and where available these are noted.

Both ProShares and Direxion offer inverse and leveraged long/short ETFs for investors wishing to hedge or speculate.

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