When we listen to the news, we mostly hear about large, brand-name companies. However, mid-sized companies and related ETFs have shown some decent gains as the economy rights itself.

According to Will McClatchy for ETFZone, overweighting or underweighting mid-caps coming out of a bear market can be a good play for an ETF portfolio, depending on the economic conditions, and mid-caps are relatively less volatile than small-caps.

As the ETF industry has exploded onto the scene in recent years, sponsors have aggressively launched funds in an attempt to gain market share. While many of these new ETFs have attracted sufficient investor funds to justify continued operation, some have failed to garner a level of investment necessary to support an active, liquid market and been shuttered. And then there are those that remain in business but are cited as having "insufficient liquidity." Although there are certain rules of thumb – assets under management (AUM) of $25 million and daily volume of 25,000 are often cited as “liquidity thresholds” – there is no hard evidence to support these guidelines. In an effort to determine where illiquidity ends and an active market begins, I analyzed the impact of size and daily volume on the liquidity of various ETFs.

To start, I divided ETFs into six baskets based on three-month average daily volume:

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The above chart represents the return for nearly every combination of equity investments you could have made over the last year. No sector, style, world region or market cap escaped devaluing more than 25%. Now, compare this to the start of our last recession between 2000 and 2001.

I come to that last conclusion by seeing treasuries continue to strengthen against the S&P as well as gold and silver. Worst hit by credit fears, as could be predicted, are small caps, who are obviously most likely to be hit by more stringent credit standards.

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Mid Cap Traditional Index ETFs
MidCap SPDRs (MDY)
iShares S&P MidCap 400 Index Fund (IJH)
iShares Russell Midcap Index Fund (IWR)
iShares Morningstar Mid Core Index Fund (JKG)
SPDR DJ Wilshire Mid Cap ETF (EMM)
Vanguard Mid-Cap ETF (VO)

iShares Morningstar Series ETFs
iShares Morningstar Large Core Index Fund (JKD)
iShares Morningstar Mid Core Index Fund (JKG)
iShares Morningstar Small Core Index Fund (JKJ)

• iShares Russell 2000 (IWM)
• iShares S&P Small Cap 600 (IJR)
• Vanguard Small Cap ETF (VB)
• Vanguard Small Cap Value ETF (VBR)
• iShares Morningstar Mid Core (JKG)
• iShares Russell Mid Cap Growth (IWP)
• Vanguard Extended Market ETF(VXF)
• SPDR 500 (SPY)
• iShares S&P Global 100 (IOO)
• streetTracks Dow Jones Stoxx 50 (FEU)

I stumbled across this article at Morningstar about large cap stocks, writes Roger Nusbaum. Apparently Morningstar defines large cap as anything above $8.5 billion. This explains a couple of things.

I have my personal portfolio plugged in to the subscription based portfolio manager, which is a great tool by the way. It says my average cap size $31 billion. The interpretation of the X-ray pages tells me I am too concentrated in large caps which makes no sense as the average cap size of the S+P 500 is about $90 billion or so.

Any ETFs or Closed-End Funds that we haven't covered that you think we should? Leave a comment below.