As 2009 draws to a close, it appears that this will be another “year of the mid cap.” Although equities of all sizes have posted strong gains this year (particularly when compared to 2008), mid caps have led the way, and mid cap ETFs have generally outperformed their small and large cap peers. Some investors take a “barbell” approach to the domestic equity portion of their portfolios, allocating assets primarily to large cap and small cap ETFs, and anticipating that the risk and return profile of mid caps will fall somewhere in between.
While they fall between these two groups in size, the same can’t always be said for performance: mid caps have been known to deliver returns both excess and inferior returns. [click to continue…]
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