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

Eli Lilly and Company (LLY) has also informed about initiating a late-stage trial on one of its experimental COVID-19 antibody treatments. The phase 3 study will ensure if LY-CoV555, a treatment developed by Eli Lilly in collaboration with Canadian biotech AbCellera, can prevent the spread of the virus in residents and staff in U.S. nursing homes. The company might enroll up to 2,400 participants who live or work at a facility that have had a recently diagnosed case of coronavirus.

Going on, the improving manufacturing numbers have instilled optimism among investors. The U.S. ISM Manufacturing PMI came in at 54.2 for July 2020, up from 52.6 in the previous month and beat market expectations of 53.6. That is the highest reading since March 2019 as manufacturing activity is recovering after the pandemic-induced turbulence. A reading above 50 indicates expansion in manufacturing, which makes up about 11% of the U.S. economy, per a Reuters article.

Mid-Cap ETFs in Focus

As such, investors seeking to capitalize on the strong fundamentals but worried about uncertainty should consider mid-cap ETFs. Below, we have presented five popular mid-cap ETFs:

Vanguard Mid-Cap ETF VO

The fund seeks to track the performance of the CRSP US Mid Cap Index, which measures the investment return of mid-capitalization stocks. With a basket of 356 holdings, it has AUM of $34.31 billion. It charges a fee of 4 basis points (see: all the Mid Cap ETFs here).

SPDR S&P MIDCAP 400 ETF Trust MDY

The fund seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of the S&P MidCap 400 Index. With a basket of 400 holdings, it has AUM of $14.93 billion. It charges a fee of 23 basis points (read: Fed Goes the Extra Mile: 6 ETF Areas to Win).

iShares Russell Mid-Cap Value ETF IWS

The fund provides exposure to mid-sized U.S. companies that are thought to be undervalued by the market relative to comparable companies and tracks the Russell MidCap Value Index. With a basket of 686 holdings, it has AUM of $9.91 billion. It charges a fee of 24 basis points.

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