After over half a year of uncertainty, confidence is finally mounting in favor of the Federal Reserve cutting interest rates in September. In fact, a slim majority of economists polled by Reuters are even betting on the Fed cutting rates three times this year, during the September, November, and December meetings. While 54% of economists are confident in three cuts, over a third of the economists polled by Reuters expect to see two cuts this year. In light of that, consider mid cap etfs.
Be it two or three cuts, the Reuters poll highlights the growing anticipation that the Federal Reserve will begin trimming down interest rates soon. With that in mind, now may be the ideal time for investors to pivot their portfolios to benefit from lower interest rates.
Among equities, much of the discussion among investors has focused on small caps and large caps. However, in a rate cut environment, there’s a good case to be made in favor of mid cap strategies.
Among equity ETFs, a mid cap strategy can operate as “the best of both worlds.” Mid caps can offer similar growth opportunities to that of small caps, while mitigating some of the inherent volatility risk that small caps often possess. Meanwhile, mid caps can provide similar stability to large caps, while largely avoiding some of the overvaluation concerns from tech stocks at the moment.
Mid-Caps with a Sustainable Twist
The Calvert US Mid-Cap Core Responsible Index ETF (CVMC ) can help investors access a well-diversified selection of U.S. mid cap companies. With a low expense ratio of 0.15%, CVMC can provide cheaper access to a portfolio of competitive mid cap stocks.
As a Calvert fund, CVMC comes with the added benefit of utilizing an ESG screening process. Utilizing an ESG screening isn’t simply good for the planet, either.
Responsible companies can promote long-term value on a resource efficient basis. The Calvert screening also seeks accountable governance and transparency, factors that investors can value within a mid-cap company.
CVMC’s responsible mid-cap portfolio has already delivered proven results. As of September 4th, 2024, the fund’s NAV has risen over 15% within the last 12 months, with the NAV jumping over 5.4% over the last three months alone.
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