The Time Is Right To Buy Mid-Cap Value ETFs

Mid caps have mostly been overlooked investing options. These securities are viewed as big and safe compared to the highly volatile small-cap exposure. But when compared to the stability of the large caps these are relatively too risky and uncertain.

Below we highlight a few factors why mid-cap ETFs can be intriguing picks right now.

Why Not Large Caps?

Now, several exporting countries will likely feel the pinch. The key foreign steel suppliers of the United States are Canada, Brazil, South Korea and Mexico. These countries also import U.S. agricultural products. Hence, with retaliatory measures from affected countries being highly feared, it is better not to have a high focus on large-cap stocks with significant international exposure.

Why Not Small Caps?

Amid the ongoing tumult induced by the proposed tariffs, higher inflationary expectations and rising rate worries, volatility is likely to prevail. This may prove to be a risk to small-cap stocks. The tariffs are likely to result in an increase in raw material cost for manufacturers that use these metals. And along with most market watchers, we too believe that companies will try to pass on some cost escalation to consumers.

Why Mid-Cap Value ETFs?

All in all, the situation is not favorable either for small caps or large caps. So, it is better to take a middle-of the-road approach. Also, after a superb Trump rally in 2017, many securities are guilty of overvaluation. Wall Street too is finding it tough to gain strength this year. In such an erratic market, it is better to add a value quotient to mid-cap picks.

 iShares Morningstar Mid-Cap Value ETF JKI

The 189-stock fund has a double-digit weight on Financials, Consumer Discretionary, Utilities and Materials. No stock accounts for more than 1.35% of the fund. It charges 30 bps in fees.

Guggenheim S&P Mid-Cap 400 Pure Value ETF RFV

The 89-stock fund has a double-digit focus on Consumer Discretionary, Financials, Information Technology, Industrials and Energy. No stock accounts for more than 3.39% of the fund, which charges 35 bps in fees.

PowerShares Russell Midcap Pure Value Portfolio PXMV

The 175-stock portfolio is heavy on Financials, Utilities, Real Estate and Consumer Discretionary. The fund charges 39 bps in fees. It also doesn't have any company concentration risk as the top holding has only 2.10% weight.

Vanguard Mid-Cap Value ETF VOE

The 206-stock fund is heavy on Financials, Consumer Goods, Consumer Services and Industrials. It charges 7 bps in fees.

Vanguard S&P Mid-Cap 400 Value ETF IVOV

The 300-stock fund is heavy on Financials, Industrials, Information Technology and Real Estate. It charges 20 bps in fees.

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