Buffett ApprenticeIVOO: Mid-cap stocks may not be as aggressive, but they are stable enough.
In the A-share market, large-cap stocks are not necessarily good investment targets. For example, bank stocks and energy stocks may not experience significant fluctuations for a long time. Except for Kweichow Moutai from 2016 to 2021, the top 10 listed companies by market capitalization have not shown growth rates as high as some companies with better growth potential.
In comparison, companies with market capitalizations ranging from several billion to tens of billions are more likely to become "hot stocks." These companies have some institutional holdings, but the proportion may not be very high. If combined with certain market trends, they might skyrocket at some point.
In contrast, large-cap stocks in the U.S. have always been the main drivers of growth. While mid-cap stocks may include some small but excellent companies, their performance tends to be less aggressive and more focused on market stability.
IVOO is an index ETF that tracks the S&P 400 MidCap Index, essentially covering typical mid-cap companies in the U.S. stock market.
The S&P MidCap 400 Index is one of the most commonly used benchmarks for mid-cap stocks. The 400 companies in this index have market capitalizations ranging from nearly $1 billion to under $20 billion. If these companies were in the domestic market, they would likely be the hidden champions of their respective industries. However, in the U.S. market, their performance varies.
Over a medium-term period, IVOO shows relatively high volatility, with mid-cap stocks exhibiting greater fluctuations than the S&P 500 or the Nasdaq Index.
Overall, however, this ETF has been trading within a range-bound pattern, unlike some indices that trend unilaterally upward or downward.
Looking at the index's components, many companies are not well-known to us. However, just like in the domestic market, these companies have certain advantages in niche sectors and may even be "hidden champions" in their industries.
From an industry perspective, industrials and consumer discretionary sectors account for the largest shares of the index. These sectors form the backbone of the economy.
Recent trends in IVOO-ETF show that its trading volume is not as active as many other growing ETFs. In a bullish market, investors might have better options. However, the advantage of products like IVOO lies in their stability and defensive nature.
This is especially valuable in a highly volatile market.$VG S&P M-Cap 400(IVOO.US)
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