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Midcap growth ETFs can be an attractive investment option for investors looking for a balance between risk and reward.
In general, midcap ETF invests in mid-sized companies ranging between $2 billion and $10 billion. These companies offer the potential for growth since they have yet to reach a large capitalization classification while offering less volatility and risk than small-cap companies.
In this article, we’ll review the best mid-cap growth ETFs in 2024, considering several factors: their ETF’s expense ratio, performance history, underlying holdings, and investment strategy.
Best Midcap Growth ETF Summary
Let’s review the table below, which summarizes all the key metrics of each top-performing midcap growth ETF.
| RFG | RFV | IMCG | VOT | FAD | PAMC | VOE | |
|---|---|---|---|---|---|---|---|
| Expense Ratio | 0.35% | 0.35% | 0.06% | 0.07% | 0.70% | 0.59% | 0.07% |
| SEC Yield | 0.26% | 1.65% | 0.89% | 0.72% | 1.92% | 0.73% | 2.27% |
| 1-Year | 16.30% | 29.98% | 20.82% | 23.14% | 19.24% | 19.28% | 9.77% |
| 5-Year | 10.00% | 17.73% | 15.34% | 13.70% | 13.43% | - | 11.30% |
| 10-Year | 5.92% | 10.42% | 11.05% | 10.12% | 10.00% | - | 8.49% |
| Dividend Yield | 0.98% | 1.34% | 0.86% | 0.72% | 0.52% | 0.69% | 2.32% |
| Dividend Growth Rate 5Y (CAGR) | 15.30% | 13.75% | 36.66% | 9.29% | 35.78% | - | 4.71% |
Here, we can see that if you want to keep your expense ratio as soon as possible, IMCG, VOT, and VOE are the best options, with expense ratios of 0.06%, 0.07%, and 0.07%.
We can also see that RFV, IMCG, and VOT are the top-performing ETFs for historical returns at a 1-year, 5-year, and 10-year. In fact, it is very clear that RFV generates the highest returns of all the other ETFs on this list.
In addition, RFV and VOE also generated the highest dividend yield this year.
Investing in RFV, IMCG, or VOT will give you the highest returns, while IMCG and VOT have the lowest expense ratios.
Invesco S&P MidCap 400 Pure Growth ETF (RFG)
| RFG | |
|---|---|
| Diversification | S&P Midcap 400 |
| Number of Holdings | 82 |
| Expense Ratio | 0.35% |
| SEC Yield | 0.26% |
| 1-Year | 16.30% |
| 5-Year | 10.00% |
| 10-Year | 5.92% |
| Dividend Yield | 0.98% |
| Dividend Growth Rate 5Y (CAGR) | 15.30% |
The Invesco S&P MidCap 400 Pure Growth ETF or RFG is an exchange-traded fund offered by Invesco. This ETF tracks the performance of the S&P Midcap 400 Pure Growth Index, which tracks the performance of the 400 midrange market capitalization companies.
The companies in the index generally fall between $3.6 billion and $13.1 billion in market capitalization. Larger companies would be considered large-cap, while smaller companies would be considered small-cap.
RFG Holdings
The RFG ETF holds approximately 82 holdings as of Jan 2024—the top 10 holdings of the ETF account for approximately 21% of the total assets. This makes the ETF portfolio quite diverse, where 72 of the holdings account for 79% of the portfolio. The largest holding is Super Micro Computer Inc., with 3.27%
| Company | % of Portfolio |
|---|---|
| Super Micro Computer Inc | 3.27% |
| Southwestern Energy Co | 2.42% |
| CNX Resources Corp | 2.33% |
| TopBuild Corp | 2.17% |
| Weatherford International PLC | 2% |
| Celsius Holdings Inc | 1.96% |
| Rambus Inc | 1.95% |
| Permian Resources Corp | 1.83% |
| Dynatrace Inc | 1.76% |
| Toll Brothers Inc | 1.75% |
| Total | 21.44% |
Invesco S&P MidCap 400 Pure Value ETF (RFV)
| RFV | |
|---|---|
| Diversification | S&P Midcap 400 |
| Number of Holdings | 91 |
| Expense Ratio | 0.35% |
| SEC Yield | 1.65% |
| 1-Year | 29.98% |
| 5-Year | 17.73% |
| 10-Year | 10.42% |
| Dividend Yield | 1.34% |
| Dividend Growth Rate 5Y (CAGR) | 13.75% |
The Invesco S&P MidCap 400 Value Growth ETF, or RFV, is an exchange-traded fund offered by Invesco.
The RFV ETF tracks the performance of the S&P Midcap Pure Value Index’s performance, an index similar to the S&P Pure Growth Index. Both indices select a subset of the S&P Midcap 400 Index and invest in those equities.
In this case, the S&P Midcap Pure Value Index invests in equities with strong value characteristics. The Index looks at a securities book value-to-price ratio, earnings-to-price ratio, and sales-to-price ratio.
The ETF selects securities that are considered a value, which means that when the market corrects, the price and earnings are likely to appreciate to be in line with their true value. This is a type of growth investment.
RFV Holdings
The RFV ETF holds approximately 91 holdings as of Jan 2024—the top 10 holdings of the ETF account for approximately 24% of the total assets. This makes the ETF portfolio quite diverse, where 81 of the holdings account for 76% of the portfolio. The largest holding is United States Steel Corp, with 2.81%.
The RFV holdings include some very common names in the industry, including Macy’s Inc., Hertz Global Holdings Inc., and Goodyear Tire.
| Company | % of Portfolio |
|---|---|
| United State Steel Corp | 2.81% |
| PBF Energy nc | 2.67% |
| Macy's Inc | 2.55% |
| Avnet Inc | 2.52% |
| TD SYNNEX Corp | 2.34% |
| Hertz Global Holding Inc | 2.32% |
| Lithia Motors Inc | 2.30% |
| Goodyear Tire & Rubber Co/The | 2.26% |
| Arrow Electronics Inc | 2.10% |
| HF Sinclair Corp | 2.06% |
| Total | 23.93% |
iShares Morningstar Mid-Cap Growth ETF (IMCG)
| IMCG | |
|---|---|
| Diversification | Morningstar Mid-Cap Growth ETF |
| Number of Holdings | 305 |
| Expense Ratio | 0.06% |
| SEC Yield | 0.89% |
| 1-Year | 20.82% |
| 5-Year | 15.34% |
| 10-Year | 11.05% |
| Dividend Yield | 0.86% |
| Dividend Growth Rate 5Y (CAGR) | 36.66% |
iShares Morningstar Mid-Cap Growth ETF or IMCG is an exchange-traded fund that aims to track mid-cap growth companies’ performance. The fund tracks the performance of the Morningstar Mid-Cap Growth ETF.
The index aims to provide a holistic view of the mid-cap growth US market. To do this the index takes the mid-cap companies, which account for approximately 20% of the market cap in the market. The 20% includes companies that fall between 70% and 90% percentile of the market cap. The index categorizes all the growth, value, and blend stocks from these companies using a 10-factor model that uses forward and historical metrics. Those that are categorized as growth stocks are invested into the index based on their market capitalization.
IMCG Holdings
The IMCG ETF holds approximately 350 holdings as of Jan 2024 and is one of this list’s largest midcap growth ETFs. The ten holdings of the ETF account for only 11% of the total assets. This makes the ETF portfolio quite diverse, where 340 of the holdings account for 81% of the portfolio. The largest holding is Crowdstrike Holdings Inc Class A, with 1.35% of assets.
| Company | % of Portfolio |
|---|---|
| Crowdstrike Holdings Inc Class A | 1.35% |
| Workday Inc Class A | 1.26% |
| Marvell Technology Inc | 1.20% |
| Trane Technologies PLC | 1.19% |
| Transdigm Group Inc | 1.17% |
| Autodesk Inc | 1.09% |
| Dexcom Inc | 1.03% |
| Public Storage Reit | 0.97% |
| Edwards Lifesciences Corp | 0.95% |
| Hilton Worldwide Holdings Inc | 0.93% |
| Total | 11.14% |
Below, we can see the breakdown by sector for IMCG. The portfolio is quite diversified, with technology being its largest sector, with 25% of the assets. The top three sectors, which are technology, industrials, and healthcare, account for 59% of the portfolio’s total assets.
| Sector | % of Portfolio |
|---|---|
| Technology | 25.45% |
| Industrials | 21.81% |
| Healthcare | 11.28% |
| Consumer Cyclical | 9.13% |
| Real Estate | 7.94% |
| Financial Services | 7.75% |
| Consumer Defensive | 5.20% |
| Communication Services | 3.84% |
| Energy | 3.02% |
| Basic Materials | 2.49% |
| Utilities | 2.07% |
Vanguard Mid-Cap Growth ETF (VOT)
| VOT | |
|---|---|
| Diversification | CRSP US Mid Cap Growth Index |
| Number of Holdings | 150 |
| Expense Ratio | 0.07% |
| SEC Yield | 0.72% |
| 1-Year | 23.14% |
| 5-Year | 13.70% |
| 10-Year | 10.12% |
| Dividend Yield | 0.72% |
| Dividend Growth Rate 5Y (CAGR) | 9.29% |
The Vanguard Midcap Growth ETF or VOT is a midcap growth ETF that aims to track the performance of the CRSP US Mid Cap Growth Index. The CRSP US Mid Cap Growth Index mimics the return of mid-capitalization growth stocks.
This index uses the CRSP Midcap Growth Index as a baseline. Using the companies that fall into the mid-cap index, which fall into the bottom 2%-15% of market capitalization. From those companies, the CRSP Midcap Growth Index includes companies classified as growth securities.
VOT is a passively managed exchange-traded fund with a full replication approach.
VOT Holdings
The VOT ETF holds approximately 150 holdings as of Jan 2024. The ten holdings of the ETF account for only 16% of the total assets. This makes the ETF portfolio quite diverse, where 140 of the holdings account for 74% of the portfolio. The largest holding is Amphenol Corp which accounts for 1.84% of total assets.
| Company | % of Portfolio |
|---|---|
| Amphenol Corp. Class A | 1.84% |
| Arista Networks Inc. | 1.82% |
| TransDigm Group Inc. | 1.65% |
| Cintas Corp. | 1.62% |
| Motorola Solutions Inc. | 1.61% |
| Welltower Inc. | 1.55% |
| Microchip Technology Inc. | 1.51% |
| DexCom Inc. | 1.48% |
| MSCI Inc. Class A | 1.32% |
| Copart Inc. | 1.31% |
| Total | 15.71% |
The ETF portfolio is well diversified between multiple sectors. Technology is the top sector, which accounts for 25% of the portfolio. The two other largest sectors are consumer discretionary and health care, which account for 13.10% and 11.50%. The top three sectors account for 49% of the portfolio, while the remaining securities are split between 8 other sectors.
| Sector | % of Portfolio |
|---|---|
| Technology | 24.80% |
| Consumer Discretionary | 13.10% |
| Health Care | 11.50% |
| Real Estate | 7.30% |
| Energy | 6.90% |
| Financials | 6.90% |
| Telecommunications | 3.90% |
| Industrials | 2.20% |
| Consumer Staples | 1.90% |
| Utilities | 1.80% |
| Basic Materials | 1.70% |
First Trust Multi Cap Growth AlphaDEX Fund (NASDAQ:FAD)
| FAD | |
|---|---|
| Diversification | Nasdaq US 700 Small Cap Value Index |
| Number of Holdings | 676 |
| Expense Ratio | 0.70% |
| SEC Yield | 1.92% |
| 1-Year | 19.24% |
| 5-Year | 13.43% |
| 10-Year | 10.00% |
| Dividend Yield | 0.52% |
| Dividend Growth Rate 5Y (CAGR) | 35.78% |
The First Trust Multi Cap Growth AlphaDEX, or FAD, is an exchange-traded fund that First Trust offers. The fund aims to track the performance of the Nasdaq Alpha Dex Multi Cap Growth index.
This index is unique compared to any other indexes used by other ETFs on this list because it’s an enhanced index offered by Nasdaq. This enhanced selects growth stocks from three different indices: the Nasdaq US 500 Large Cap, Nasdaq US 600 Mid Cap, and Nasdaq US 700 Small Cap. Using the selection methodology, the index includes 676 holdings, 50% from Nasdaq US 500 Large Cap, 30% from Nasdaq US 600 Mid Cap, and 20% from Nasdaq US 700 Small Cap.
FAD Holdings
The FAD ETF holds approximately 676 holdings as of Jan 2024.
The ETF’s ten holdings account for only 6% of the total assets. This makes the ETF portfolio quite diverse, where 656 holdings account for 94% of the portfolio. Super Micro Computer Inc. is the largest holding, accounting for 0.67% of total assets.
| Company | % of Portfolio |
|---|---|
| Super Micro Computer Inc. | 0.67% |
| CrowdStrike Holdings, Inc. (Class A) | 0.52% |
| Arista Networkks, Inc. | 0.51% |
| Deckers Outdoor Corporation | 0.51% |
| Datadog, Inc. (Class A) | 0.49% |
| DoorDash, Inc. (Class A) | 0.49% |
| Fair Isaac Corporation | 0.49% |
| Meta Platforms Inc. (Class A) | 0.49% |
| Apollo Global Management, Inc. | 0.48% |
| DraftKings Inc. | 0.48% |
| Total | 5.13% |
From the table below, we can see the sector diversification. Like many other ETFs on this list, the top three sectors account for 63% of the total portfolio. The largest sector is technology with 25%, the second being industrials at 23% and consumer cyclical at 14%.
| Sector | % of Portfolio |
|---|---|
| Technology | 25.24% |
| Industirals | 23.37% |
| Consumer Cyclical | 14.26% |
| Financials | 8.18% |
| Health Care | 7.77% |
| Energy | 7.07% |
| Consumer Services | 4.07% |
| Real Estate | 3.46% |
| Consumer Defensive | 3.40% |
| Basic Materials | 2.44% |
| Utilities | 0.74% |
Pacer Lunt MidCap Multi-Factor Alternator ETF (PAMC)
| PAMC | |
|---|---|
| Diversification | S&P Midcap Multi-factor Index |
| Number of Holdings | 401 |
| Expense Ratio | 0.59% |
| SEC Yield | 0.73% |
| 1-Year | 19.28% |
| 5-Year | - |
| 10-Year | - |
| Dividend Yield | 0.69% |
| Dividend Growth Rate 5Y (CAGR) | - |
The Pacer Lunt MidCap Multi-Factor Alternator ETF is one of the newest ETFs on this list, with an inception date of 2020. The ETF tracks the performance of the Lunt Capital US MidCap Multi-Factor Rotation index. This index uses the S&P Midcap 400 Index as a benchmark index.
This index is one of the most unique ETFs when it comes to selecting its equities. First, using the S&P Midcap 400, it takes its stock categories eight different rankings provided by S&P: volatility, momentum, quality, and value. The index will select and invest in the two factors with the highest rating equally. This process is re-evaluated, meaning on a monthly basis, the composition of the ETF can change significantly compared to other ETFs.
Vanguard Mid-Cap Value Index Fund (VOE)
| VOE | |
|---|---|
| Diversification | CRSP US Mid Cap Value Index |
| Number of Holdings | 199 |
| Expense Ratio | 0.07% |
| SEC Yield | 2.27% |
| 1-Year | 9.77% |
| 5-Year | 11.30% |
| 10-Year | 8.49% |
| Dividend Yield | 2.32% |
| Dividend Growth Rate 5Y (CAGR) | 4.71% |
The Vanguard Mid-Cap Value ETF or VOE is a small-cap growth ETF offered by Vanguard. VOE aims to track the performance of the CRSP US Mid-Cap Value Index.
This index uses the CRSP US Mid-Cap Index as a baseline. Using the companies that fall into the mid-cap index, which fall into the bottom 16%-70% of market capitalization. From those companies, the CRSP US mid-cap value index includes companies classified as value securities.
VOE is a passively managed exchange-traded fund with a full replication approach.
VOE Holdings
The VOE ETF holds approximately 199 holdings as of Jan 2024. The 10 holdings of the ETF account for only 13% of the total assets. This makes the ETF portfolio quite diverse, where 189 of the holdings account for 77% of the portfolio. The largest holding is PACCAR Inc. which accounts for 1.38% of total assets.
| Company | % of Portfolio |
|---|---|
| PACCAR Inc. | 1.38% |
| Arthur J Gallagher & Co. | 1.31% |
| Carrier Globall Corp. | 1.30% |
| PG&E Corp. | 1.24% |
| DR Horton Inc. | 1.16% |
| Nucor Corp. | 1.16% |
| ONEOK Inc. | 1.11% |
| Digital Realty Trust Inc. | 1.10% |
| Centene Corp. | 1.70% |
| Ferguson plc | 1.06% |
| Total | 12.52% |
The table below will show the diversification by sector. VOE is one of the most diversified ETFs on this list, with the top three sectors accounting for 50% of the portfolio. The top sector is industrials, which accounts for 19.40%, while financials account for 17.50% and consumer discretionary for 13%.
Mid-Cap Growth ETF Performance Comparison
Performance is one of the most important factors to consider when investing in an ETF. Below, we can see the cumulative annual performance of each ETF. The data shows that RFV is consistently one of the top-performing ETFs. In addition, other top-performing ETFs, IMCG and VOT, have also been shown to be top performers and are consistently the second or third-best performers of the group.
Final Thoughts
In this article, we covered the best-performing midcap ETFs for 2024.
If you want to invest in ETFs that will generate the highest returns and some of the lowest expense ratios, three key ETFs stand: RFV, IMCG, and VOT. However, if you want to find a balance between high returns and dividend yield, then RFV or VOE might be a better investment for you.
