Why I Would Never Sell This Mid-Cap ETF

Core Viewpoint - The Vanguard Mid-Cap ETF is recommended for long-term investors seeking growth potential in mid-cap stocks, which have been historically overlooked compared to large-cap and small-cap stocks [1][5]. Group 1: Investment Opportunity - Mid-cap stocks are often neglected due to less coverage by sell-side analysts, leading to fewer headlines and perceived difficulty in stock selection [2]. - The Vanguard Mid-Cap ETF is recognized as one of the largest and best options for mid-cap exposure, appearing on analysts' top recommendations for 2026 [4]. - Over the past decade, this ETF has outperformed the Russell 2000 and S&P 600 indexes, challenging the notion that small caps always provide better growth potential [5]. Group 2: Risk Mitigation - The ETF's performance is bolstered by increasing concerns about concentration risk in the market, making mid-caps a strategic choice to mitigate this risk [7]. - The Vanguard ETF allocates only 12.7 percentage points to technology stocks, ensuring a diverse portfolio with no single holding exceeding 1.25% [8]. Group 3: Flexibility and Valuation - The median market capitalization of the ETF's holdings is $41.9 billion, indicating a shift towards larger stocks that can reduce volatility compared to traditional mid-cap valuations [9]. - The standard definition of mid-cap stocks may be outdated, as rising company valuations suggest a need for reevaluation [9]. Group 4: Cost Efficiency - The ETF features a low expense ratio, with an investor paying only $4 annually on a $10,000 investment, significantly lower than the category average of $86 [10]. - Low portfolio turnover has contributed to the ETF's outperformance against mid-cap competitors over the past decade, reinforcing its value proposition [11].