The Case for Mid and Small-Cap Stocks Right Now

Just about 10 “mega-cap” firms have driven more than 80% of the S&P 500’s growth in 2023. For some, that’s proven to be a source of robust returns, but that statistic also means heightened concentration risk for everyone. Is now, then, the time to take a closer look at the case for mid and small-cap stocks? They may offer more than just diversification against a top-heavy S&P 500, as discussed during VettaFi’s recent Equity Symposium.

VettaFi Vice Chairman Tom Lydon hosted a panel on mid and small-cap (SMID) stocks during the Symposium titled “The Case for Investing in Mid and Small-Cap Stocks Today.” The panelists, SS&C ALPS Advisors SVP, Director of ETF Portfolio Management & Research Andy Hicks, and VanEck product manager and CFA Coulter Regal, each took the opportunity to talk about where investors could look in the small and mid-cap space right now.

VanEck product manager and CFA Coulter Regal

Andy Hicks VettaFi Symposium

SS&C ALPS Advisors leader Andy Hicks

Viewers had the opportunity to respond to a poll asking how much their current client portfolio had allocated to SMID cap stocks. Respondents shared that 40% of them had between 10%-20% allocated to SMID stocks, while 30% had between 6%-10% allocated. Recent data from VettaFi shared during the discussion showed a clear emphasis on growth over value among SMID ETFs on VettaFi platforms, as well.