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Opinions Stan Wong
iShares Core S&P Mid-Cap ETFIJHTOP PICKOct 10, 2024
Stan WongStock price when the opinion was issued
As of Jun 12, 2026. Market Open.
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Mid-caps tend to be more leveraged to economic growth in the US. As long as that economic growth continues, mid-caps will recover and put some performance on the board. MER is only 5 bps. Important to diversify, and this ETF helps with that.
Stan WongImportant to diversify away from just the S&P 500, which is ~40% in tech and tech-related stocks. A bit more leveraged to US economic growth, so can perform well as long as that trend is intact. He's been doing this a long time, and eventually the excitement over AI and semiconductors will give way to other sectors performing well.
Stan WongLong term, mid-caps do better than large caps and small. So if you're patient with this space, you'll see better valuations and potentially better returns. Can really benefit from changes in the macro economic environment such as lower interest rates.
Stan Wong
400 mid-cap names, in the $2-10B USD range. Likes that space, significant valuation (18x PE) discount to the S&P (25x PE). Names include: ILMN, WSM, TOL, and LII (which he also holds separately).
Better growth forecast of 14% from mid-caps for 2025, 16% for 2026. Large cap forecast is 13% for 2025, 11% for 2026. Falling interest rate is beneficial for mid-caps. Mid-caps are more domestic, and Trump tax cuts will benefit. Historically when tax cuts start, mid-caps outperform large. MER is 0.05%.
Stan Wong
Toll Brothers is in here. Mid-caps tend to trade at higher valuations than large-caps, but not today. Trades at 17.5x PE, while the S&P is at 25x PE. Seeing higher earnings growth projections from the mid-cap space, 15.4% for 2025 and 17.6% for 2026. Whereas the S&P is a bit lower at 13.6% and 10%.
Mid-caps today give you better growth and substantially better valuation. Names include ILMN, TOL, LII, WSM. You want to focus on the names that no one's talking about right now, but will 3 years from now. Falling interest rates also help. Historically, mid-caps tend to be perform better than large- and small-caps 1 year and 3 years out after the first rate cut.
Great way to play the rate-cutting environment, as well as to diversify away from, and complement, the mega-caps in your portfolio.