Make Way for Mid-Cap Outperformance Says Vaughan Nelson Manager

Mid-cap stocks will outperform in the coming year as the pool of attractive small-cap stocks has dried up, said Dan Hughes, client portfolio manager at Natixis Vaughan Nelson Funds. Hughes added that security selection will become paramount after a '5-year beta wave' and high active share strategies will prevail. He said 2015 may bring consolidation and volatility due to current low conviction in the broad equity markets. Finally, Hughes said lower oil is helping the consumer, but that positive is being offset by increased volatility due to economic and geopolitical concerns associated with the drop in energy prices.