Mid-caps have often been left out of basic asset allocation models, to the detriment of long-term investors.

Although they make up approximately 27% of the domestic equity universe, only 15% of mutual fund assets invested in Morningstar's equity style box are invested in funds that are classified as mid-cap (as of 12/31/10).

Mid-caps have offered investors six distinct advantages:

Long record of outperformance — Mid-caps have outperformed other cap sizes over the long-term as of December 31, 2010.
Consistent record of outperformance — Mid-caps have outperformed large caps and small caps for the majority of rolling periods within the last 30 years.
Better risk/reward relationship — In the majority of periods ranging from one to 30 years, mid-caps have had a higher sharpe ratio than other cap sizes.
Strong risk-adjusted return over full market cycles — Mid-caps have historically outperformed small caps heading into recessions and large caps coming out.
Strong position in the current market environment — Mid-caps have historically done well in the periods following market bottoms.
Positive addition to an allocated portfolio — Adding an allocation of up to 40% in mid-caps has improved the risk/reward relationship of portfolios that only had large cap and small cap allocations.

(Click on the links for more information)

Download the Why Mid-cap? white paper and use the interactive charting tool to see how an allocation to mid-caps can result in better risk-adjusted returns for your clients.

Using the Russell 3000 Index to represent the domestic equity universe and the Russell Midcap Index to represent mid-caps as of 12/31/10.

Interactive Comparison Tool.

Don’t believe mid-caps beat small caps over every 10-year period? Use the interactive charting tool to check mid-caps performance vs. small and/or large.

** Now with data through 12/31/11 **

Read Our White Paper:

Why Mid-Cap (1 MB, PDF)

How does it work?

What are mid-caps?

Mid-cap stocks are companies with market caps typically between $2 billion and $10 billion that have established track records as well as a history of growing shareholder value …

much as large companies do, but like many small companies, much of their growth potential is still untapped.

Mid-caps are often seen as overlooked and underappreciated. Though they make up approximately 27% of the investable universe, only 15% of mutual fund assets invested in Morningstar’s equity style box are invested in funds that are classified as mid-cap (as of 12/31/10).

See how they
have performed