Here's Why Mid-Cap ETFs Could Make For A Safer Bet Now

In the current scenario, where the market is behaving in a highly unpredictable manner, a mid-cap investment strategy can come in handy. Investment in mid-cap funds is often recognized as a good portfolio diversification strategy. These funds combine attractive attributes of both small and large-cap ETFs. While large companies are normally known for stability and the smaller ones for growth, mid-caps offer the best of both worlds.

The rapidly spreading coronavirus outbreak seems to have unnerved market participants as the total number of cases has crossed 4.7 million with at least 150,000 deaths, per a CNN report. Also, the U.S. economy’s second-quarter GDP’s most devastating plunge of 32.9% on an annualized basis, according to the Commerce Department’s first reading of the data, dented investors’ optimism (going by a CNBC article).

Moreover, the rising number of coronavirus cases in the United States hurt consumer confidence in July as consumers are worried about the job prospects and business conditions across the nation. The Conference Board's measure of consumer sentiment index stands at 92.6, comparing unfavorably with June’s reading of 98.3.

Investors are apprehensive of another round of business restrictions and lockdown measures might derail the economic recovery achieved so far.

Factors Fueling Optimism

As the number of coronavirus cases continues to rise, all the eyes are on developments in vaccine and treatments. Favorable updates on two vaccine candidates being made by Moderna (MRNA) and Pfizer (PFE) in collaboration with German biotech firm BioNTech came to the fore. These companies began the late-stage study on their coronavirus vaccines. Other vaccine developers that are being supported by the Operation Warp Speed are also nearing the late-stage trials. These include an experimental vaccine being developed in collaboration with the University of Oxford and AstraZeneca (AZN), a vaccine candidate from Johnson & Johnson (JNJ) and another one from the biotechnology company Novavax (NVAX), per The Washington Post article.

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