Mid cap stocks are often overlooked, suggesting the asset class is conducive to active management. Enter the Natixis Vaughan Nelson Mid Cap ETF (VNMC), which debuted last year.
The Natixis Vaughan Nelson Mid Cap ETF takes advantage of temporary information and marketplace inefficiencies in the mid cap universe to find opportunities to invest in companies at valuations materially below their long-term intrinsic value. The fund invests in companies within the market capitalization range of the Russell Midcap® Value Index at the time of purchase. Chris Wallis (CEO & CIO), Dennis Alff, and Chad Fargason are the named portfolio managers.
Mid cap companies are slightly more diversified than their small cap peers, which allows many to generate more consistent revenue and cash flow, along with more stable stock prices. Many are not so big that their size slows down growth.
Mid Caps as the Market's Sweet Spot
As investors look over their equity market exposure, investors may find that large cap stock positions are too big for rapid growth and small caps may expose them to more volatile short-term moves. Middle capitalization stocks, or sometimes referred to as the market’s sweet spot, could help investors achieve improved risk-adjusted returns.
Leveraging the New York Stock Exchange (NYSE)’s Proxy Portfolio Methodology approach, Natixis’s semi-transparent active ETFs disclose proxy portfolios on a daily basis that closely track the actual portfolios’ intraday performance. This structure allows the portfolio managers to shield the identity of stocks on which they are actively trading, while still providing market makers enough information to offer competitive bids and asks on the ETFs. Natixis’s active semi-transparent ETFs give investors access to highly skilled active managers through a tax-efficient and lower cost vehicle.
For more on active strategies, visit our Active ETFs Channel.