SMIDcap Stocks: 2024’s Big Opportunity?

If 2023 was the year of the mega cap tech stock, 2024 may see SMIDcap stocks rise to new prominence. While key names in the “Magnificent Seven” remain big players, strategies that look for SMIDcap opportunities could appeal. Valuations are such that investors may want to consider new approaches.

See more: PwC Survey: Active ETFs to See Significant Demand

That was the main focus of discussion during the second segment of VettaFi’s Equity Symposium on Wednesday, March 13. In a discussion titled “Valuation Matters: Know What You Own,” T. Rowe Price’s Lead Portfolio Manager Jodi Love and VanEck’s ETF Product Manager Coulter Regal discussed their respective shops’ views on valuations and opportunities.

Hosted by VettaFi Vice Chairman Tom Lydon, the pair discussed their firms’ approaches and their related ETFs. If 2023’s story focused on the Magnificent Seven, then what lies ahead in 2024? For Love, opportunities elsewhere in the market appeal.

“I think the rest of the market should not be ignored this year,” she said. “We do strongly believe that small and mid-cap stocks are really attractively valued right now. Small-cap S&P 600 is trading at 14 times versus the 20-year average of 16.5 times, so just over a 15% discount.”

VanEck’s Regal also sees opportunity in smaller firms, as the Magnificent Seven started 2024 with some divergence.