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Mid Cap Funds Begin To Join Large Caps With Significant Outflows

We have seen some end-of-the quarter profit taking in Large and Mid-Cap equities, at least evidenced by the flows in ETFs. In contrast, we’re seeing noticeable inflows into Small-Cap Equities via IWM (iShares Russell 2000, Expense Ratio 0.20%.

Today, we would like to point out the $700 million and $400 million respectively that has vacated MDY (SPDR S&P Midcap 400, Expense Ratio 0.25%) and IJH (iShares Core S&P Mid-Cap, Expense Ratio 0.07%).

IJH has over $38 billion in assets under management, while MDY is the second largest Mid-Cap ETF behind it with $19.5 billion. So while recent redemptions are certainly not gigantic in size, they’re still notable nonetheless given the year-to-date underperformance MidCaps have displayed versus the Large-Cap S&P 500 (trailing by nearly 300 basis points YTD).

Both funds are market-capitalization weighted of course, but well diversified in that the top weighted holding in IJH (WWAV) only consumes 0.59% of the portfolio. Other top holdings are as follows: RMD (0.58%), SNPS (0.58%), RJF (0.58%), and CDK (0.57%).

We have mentioned XMLV (PowerShares S&P MidCap Low Volatility Portfolio, Expense Ratio 0.25%, $60 million in inflows YTD) as having potential in this space as well, and it appears that it has not gone unnoticed as the fund now has a notable $954 million in AUM.


The iShares Core S&P Mid Cap ETF (NYSE:IJH) was trading at $168.23 per share on Monday afternoon, down $0.43 (-0.25%). Year-to-date, IJH has gained 1.75%, versus a 4.55% rise in the benchmark S&P 500 index during the same period.

IJH currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #1 of 25 ETFs in the Mid Cap Blend ETFs category.

Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, Paul Weisbruch, does not endorse or recommend any issuer or security mentioned herein.

About the Author: Paul Weisbruch

paul-weisbruchPaul Weisbruch is the VP of ETF/Options Sales and Trading at Street One Financial. Prior to joining the team at Street One, Paul served as the Director of RIA and Institutional ETF Sales at RevenueShares ETFs from December 2007 until November of 2009. Before RevenueShares, Paul was employed by Susquehanna International Group from 2000 until 2007 serving in roles including OTC/NYSE Institutional Block Trading, Nasdaq/OTC Market Making, ETF/Derivatives Intelligence and Strategy, Algorithmic Trading, as well as acting as the PHLX Floor Specialist in the ETFs, SPY and DIA.Paul has been actively involved in the ETF space from both a product and trading standpoint since 2000. Additionally, Paul has well forged relationships with national RIAs, institutional pension fund managers and consultants, mutual fund and hedge fund managers, and also the ETF media. Co-authoring the “S1F ETF Daily” since 2009, the daily piece has become a must for many portfolio managers in the ETF space, with segments regularly appearing in the likes of Barron’s, WSJ, and for instance.

He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.

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