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.

On July 30, Fidelity Viewpoints presented the case for mid-cap stocks in “Don’t Overlook Mid-Caps.” They argue that mid-caps “historically performed well coming out of a recession,” trade at the lowest valuations since 1990-1991, and trade below historical valuations such as price to sales.

Long-term investors have moved away from asset allocation strategies in recent months, due to increased correlation between assets. During the bull market, analysts debated the merits of small caps versus large caps, growth versus value. Those discussions still take place, but they’ve been drowned by the collapse in equity, commodity and real estate prices. The difference between two market capitalization groups wasn’t as big a concern for investors when their decision was “to invest or not to invest.” Furthermore, industry- and country-specific news has dominated, with commodities, technology, emerging markets and financials grabbing headlines.

The Rydex ETFs have not gotten much publicity, possibly because they have not launched any new ETFs recently. However, they do have some very interesting and unique ETFs.

The Rydex ETFs that I found were the most interesting were their little known pure style ETFs (RPG, RPV, RFG, RFV, RZV, RZG). They are unique ETFs that are unlike any other ETFs that exist. There are six ETFs: a value ETF and a growth ETF each for large cap, mid cap, and small cap.

Here are the ten ETFs with the largest increase in value traded (VT) for the week ending May 01, 2009. The ranking is based on a simple comparison of the five-day average value traded (closing price times volume) versus the 50-day average.

Swine flu related ETFs had a significant increase in trading this week, but not enough to crack the top 10. iShares MSCI Mexico (EWW) is #32 in our rankings with a 58% increase in VT. One newsworthy ETF, iShares MSCI Taiwan (EWT), made the list with a +12.4% gain for the week and a 104% surge in value traded.

Here are the ten ETFs with the largest volume spikes for the week ending April 24, 2009. We calculate this by looking at the five-day average volume versus the 50-day average volume.

We exclude ETFs and ETNs that did not have an Average Daily Value Traded (ADVT) of at least $1 million for the past 21 market days. We look only at those products in the upper ETF Liquidity Tiers, which represents approximately 45% of the universe of US-listed ETFs and ETNs. This step eliminates many of the peculiarities associated with low volume securities.

Hedge fund Replication

My belief is that the US dollar is going to begin a gradual ascent, along with interest rates and a resultant recovery in the financial sector (wider spreads will do the trick after the remainder of the dirty bathwater is tossed out before the election). I am not a bull on Europe, especially "old Europe" and Russia. I am bullish on New Europe, the Pacific ex-China and the emerging Middle East. Modest commodity exposure remains essential. Certainly there are other areas that are interesting as well.

While having a few idle moments, I constructed a screen of ETFs that have had volume increases of over 100% compared to their 90-day moving average. Here are the eleven that made the cut:

iShares Broad/Total Market Growth & Value ETFs
iShares Russell 3000 Growth Index Fund (IWZ)
iShares Russell 3000 Value Index Fund (IWW)

Roger Nusbaum submits: Big shout out to Bill Cara for getting the nod on the Forbes.com Adviser Soapbox page. Bill's topic was his belief that there are too many ETFs.

In a way I agree and in a way I disagree.

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Some of the investment tools used by these professionals are now available to the public. There are several companies that have developed families of mutual funds and ETFs that bundle all these exotic vehicles into easy to understand funds that track common indexes. I will focus on two companies, Rydex and ProShares, as I describe a strategy that will allow you to invest and profit like the professionals.