Comparing Midcap ETFs Year-to-Date

Within mid-cap exchange traded funds you can find core, growth, value, leveraged, market-cap and fundamentally weighted. But how do they compare against one another?

Investor's Business Daily reports that in comparing 25 mid-cap ETFs, a case can be made for leveraged funds and fundamental indexing. ProShares' mid-cap ETFs came out ahead of other providers including iShares, SPDRs, PowerShares, Vanguard and WisdomTree. Some of the results are:

* ProShares Ultra Mid-Cap 400 (MVV) is up 25% for the year. Before jumping into the ProShares game, beware that leverage funds can amplify losses.
* Second place is the fundamentally weighted PowerShares Dynamic Mid-Cap Growth (PWJ), which is up 19% for the year.
* iShares Russell 2000 (IWM) is up 9%, which is market-cap weighted.
* The fundamentally weighted WisdomTree Mid-Cap Dividend Fund (DON) came in last. It is up 6% for the year.

Looking at these mid-cap ETFs, there is no clear answer as to whether fundamental indexing is better than market-cap indexing. Fundamental indexes don't have a long track record, so more time is needed to give them a fair evaluation.

Obviously the leveraged ETF outperformed the others, but if the index it tracks had been down, it would have been the worst performer. No matter what index type you choose, it's important to have an exit strategy.

Comments

[george.mardre:]

IWM is not mid-cap. The Russell 2000 is an index of small cap stocks.

2007 Jul 06 10:37 AM

[mitsuo:]

Tommy probably referring to IWR? IWM only returned 6% YTD.

2007 Jul 06 10:41 PM

[mnymgmnt:]

He was referring to IWR up 12.01% YTD.

2007 Jul 07 10:06 AM

[mitsuo:]

No, he wrote 9%.

2007 Jul 08 10:00 PM