4 Best US Mid-Cap Index Mutual Funds

Mid-cap stocks are the unsung heroes of the stock market, often holding their own against their large-cap counterparts. Mid-cap is short for mid-capitalization, which typically describes mid-sized corporations with a market value of $2 billion to $10 billion. The S&P MidCap 400 Index has returned an average of more than 11% annually from 1994 through March 2023.

Mid-cap stocks likewise hold competitive advantages and greater financial resources than small-cap names. Investors seeking diversified mid-cap exposure may wish to consider the following passively managed index-based mutual funds.

The Vanguard Mid-Cap Index Fund Admiral Shares (VIMAX)

The Vanguard Mid-Cap Index Fund Admiral Shares (VIMAX) is a low-cost fund that provides broad exposure to mid-cap equities. The fund has a 0.05% expense ratio and requires a minimum investment of $3,000 as of the end of 2023. The fund also held $161.5 billion in assets spread across 316 stocks. Its five-year average annual return was 9.38%, compared with 9.39% for its benchmark.

Sector Diversification

The top industries by weighting for the VIMAX as of Q2 2024 include:

• Industrials: 20.7%
• Technology: 14.5%
• Financials: 12.7%
• Consumer discretionary: 12.3%
• Health care: 9.3%
• Utilities: 8.1%

Portfolio Holdings

Some of the top 10 holdings for the VIMAX include:

• Amphenol Corp.
• TransDigm Group Inc.
• Motorola Solutions Inc.
• Constellation Energy Corp.
• Welltower Inc.

Vanguard also offers an exchange traded fund (ETF) called the Vanguard Mid-Cap ETF (VO), which is very similar to the VIMAX. However, the ETF version has a slightly lower expense ratio at 0.04% and requires only a minimum investment of $1 for its minimum investment requirement.

BNY Mellon MidCap Index Fund Investor Shares (PESPX)

BNY Mellon’s PESPX aims to match the performance of the S&P MidCap 400 by being fully invested in stocks included in the index and buying futures whose performance is tied to the index. It seeks a 0.95 correlation before fees and expenses. The fund has a 0.50% total expense ratio and requires a minimum investment of $2,500 as of July 2024.

As of Q2 2024, the PESPX held $1.61 billion in assets. The fund registered a 9.74% five-year average annual return, compared with 10.27% for its benchmark.

Sector Diversification

The top industries by weighting as of June 30, 2024, include:

• Financials: 18.5%
• Industrials: 16.8%
• Technology: 9.1%
• Health care: 8.4%
• Retail: 6.3%

Portfolio Holdings

Of the 403 investments in the PESPX, some of the top 10 holdings as of Q2 2024 include:

• Pure Storage
• Carlisle Companies
• Williams-Sonoma
• EMCOR Group
• Lennox International

The Fidelity Mid Cap Index Fund (FSMDX)

The Fidelity Mid Cap Index Fund (FSMDX) aims to provide results that match the total return of mid-cap companies in the United States. It typically invests 80% of assets in stocks included in the Russell Midcap Index.

There is a 0.025% expense ratio and no minimum investment requirement. As of Q2 2024, the fund held $34.1 billion in assets. Its five-year average annual return was 9.46%, matching its benchmark.

Sector Diversification

The top industries by weighting for the FSMDX as of June 30, 2024, include:

• Industrials: 19.9%
• Financials: 16.1%
• Information technology: 13.7%
• Consumer discretionary: 10.4%
• Health care: 9.3%

Portfolio Holdings

There are 810 holdings in the FSMDX. Some of the top 10 holdings, which represent 6.2% of the fund as of Q2 2024, include:

• Crowdstrike Holdings
• Amphenol Corporation
• Trane Technologies
• KKR & Co.
• Transdigm Group

The Columbia Mid Cap Index Fund Class A (NTIAX)

Columbia’s NTIAX tracks the performance of the S&P MidCap 400 by fully replicating the index. The fund has a 0.45% net expense ratio as of Q2 2024.

As of June 2024, the NTIAX had $2.61 billion in assets and a $2,000 minimum investment requirement. Its five-year average annual return was 9.77%, compared with 10.27% for its benchmark.

Sector Diversification

The top sector holdings as a percentage of the fund as of Q2 2024 were:

• Industrials: 22.1%
• Financials: 16.0%
• Consumer discretionary: 14.7%
• Information technology: 9.6%
• Health care: 9.3%

Portfolio Holdings

There are 402 holdings in Columbia’s NTIAX. Some of the top 10 holdings, which represent approximately 6.32% of the fund as of June 30, 2024, include:

• Pure Storage Inc.
• Carlisle
• Williams-Sonoma
• Lennox International
• Emcor Group

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