Is There an Index for Tracking Mid-Cap Stocks?

There are several indexes for tracking mid-cap stocks. The most widely referenced is the S&P Mid-Cap 400, but others include the Russell Midcap and Wilshire US Mid-Cap Index. Used as a tool for investing in stocks, index mutual funds, or exchange-traded funds (ETFs), a stock index is a hypothetical portfolio of securities representing a specific market, such as mid-, large- or small-cap. The term “cap” refers to market capitalization, which is calculated by multiplying a company’s stock price by its total number of outstanding shares.

Key Takeaways

• There are various indexes that track mid-cap stocks, including the Russell Midcap and the S&P Mid-Cap 400.
• FINRA defines mid-cap stocks as those with a market capitalization between $2 to $10 billion.
• Top ETFs that track the mid-cap space include the iShares Core S&P Mid-Cap ETF (IJH) and Vanguard Mid-Cap Index ETF (VO). 

What Is a Mid-Cap?

FINRA defines mid-cap companies as those with a market capitalization between $2 billion and $10 billion. Small-cap companies range from $250 million to $2 billion and micro-cap companies are under $250 million. Large-cap stocks range from $10 billion to $200 billion, while mega-cap stocks have a market capitalization of $200 billion or more. Other organizations may use different ranges.

Investors interested in diversifying their portfolios beyond big stocks can use the mid- and small-cap indexes to help determine how small and medium companies are performing as a whole. An investor can also use an index as a benchmark for looking at the performance of a specific stock in comparison to other stocks in the same class.

Other indexes track very large (mega-cap) and very small (micro-cap) stocks. Indexes can also be used for tracking securities based on other criteria aside from size. Indexes are available for foreign investments and the bonds market, for example.

Note

All else being equal, the higher capitalization a stock has, the lower returns it generally generates as it typically has less risk compared to lower cap stocks.

Investing in Mid-Cap Indexes

Certain investment management companies offer ETFs that track these indexes. These are the best investments for investors looking to get a broad range of exposure to the mid-cap space.

iShares Core S&P Mid-Cap ETF (IJH)

The iShares Core S&P Mid-Cap ETF (IJH) tracks the S&P MidCap 400 Index. The IJH has 414 holdings, with its top three being Williams Sonoma Inc (WSM), EMCOR Group Inc (EME), and Interactive Brokers Group Inc (IBKR) as of January 2025. Its top-weighted sectors are industrials and financials. The ETF has returned an annualized 10.29% over the last five years as of December 31, 2024. Its expense ratio is a low of 0.05%.

Vanguard Mid-Cap Index ETF (VO)

The Vanguard Mid-Cap Index ETF (VO) tracks the CRSP US Mid Cap Index. It has 316 holdings, with Amphenol Corp. Class A (APH), Welltower Inc (WELL), and Palantir Technologies Inc Class A (PLTR) being its top three holdings as of January 2025. VO’s expense ratio is 0.04%. 

iShares Russell Mid-Cap ETF (IWR)

The iShares Russell Mid-Cap ETF (IWR) tracks the Russell MidCap Index. It has 817 holdings and an expense ratio of 0.19%. Its top three holdings are Palantir Technologies Inc Class A (PLTR), Applovin Corp Class A (APP), and Williams Inc (WMB) as of January 2025.

Other Mid-Cap Index Options

If you’re looking to for enhanced returns or specific sector exposure within the mid-cap space, factor-based or smart beta ETFs can be a viable option. These funds weight stocks based on fundamental factors such as value, growth, momentum, or volatility rather than traditional market capitalization weighting. For example, the Invesco S&P MidCap 400 Pure Growth ETF (RFG) focuses on mid-cap companies demonstrating strong earnings growth.

Another option is to focus on actively managed mid-cap mutual funds such as the Fidelity Mid Cap Fund (FMCSX). This type of index tries to generate excess returns through stock selection and tactical allocation (as opposed to more passive forms of investing in funds). While these funds may outperform their passive counterparts in certain environments, they typically carry higher expense ratios. For instance, the expense ratio for FMCSX is 0.79%.

More sophisticated investors may opt for derivative-based strategies, such as mid-cap index futures and options. Those options would be put on broad mid-cap ETFs such as SPDR S&P MidCap 400 ETF Trust (MDY). This is a way to not only track the movement of mid-cap indices but hedge downside risk or speculate on market movements with lower capital requirements to try and amplify returns.

What Is a Mid-Cap Index?

A mid-cap index is a stock market index that tracks the performance of mid-capitalization companies, typically defined as those with market values between $2 billion and $10 billion. Note that the criteria of mid-cap may vary across regulatory entities or advisors.

Why Should Investors Consider Mid-Cap Stocks?

Past performance does not guarantee future results. However, some investors would argue mid-cap stocks present a compelling investment opportunity because they often outperform large-cap stocks in periods of economic expansion while being less volatile than small caps. 

Which Are the Most Popular Mid-Cap Indexes?

Some examples of mid-cap indexes include the S&P MidCap 400, the Russell MidCap Index, and the MSCI USA Mid Cap Index.

Is There an Index for Tracking Mid-Cap Stocks?

Yes. As mid-cap stocks are fairly popular among investors due to their return upside compared to their risk profile compared to smaller cap stocks, there are many indices that track mid-cap stock movement.

The Bottom Line

There are plenty of indices that track mid-cap stocks, such as the iShares Core S&P Mid-Cap ETF or the Russell MidCap Index. These funds represent companies with market capitalizations between small and large caps and often appeal to investors looking to be a little more aggressive pursuing returns without diving into the risk of small cap stocks.