Midcap stocks could hit the sweet spot next year for investors looking for quality at an attractive price. Midcap stocks, which are loosely defined as companies with market capitalizations between $2 billion and $10 billion, are often considered the overlooked middle child in the asset class universe, squeezed between their large-cap and small-cap peers. Lately, however, they’ve been outperforming. The SPDR S & P Midcap 400 ETF Trust (MDY) and the iShares Core S & P Mid-Cap ETF (IJH) rallied 7.5% this quarter, better than the S & P 500’s 5.6% gain, though weaker than the Russell 2000’s 8% advance. In November, the MidCap S & P 400 notched its best month of the year. MDY YTD mountain MDY Many investors expect further gains for midcaps as the market continues to rotate. They say medium-size companies offer better quality businesses than small caps, as well as better growth than large caps.
