Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our content.
Invest in the S&P 400
Investors seeking growth and stability may be interested in this index’s mid-cap stocks.
The mid-cap stocks it tracks hold the potential for profit — but the opportunity for growth depends largely on where the company is in its life cycle.
What is the S&P 400?
The S&P MidCap 400 is an index composed of 400 US mid-cap stocks — stocks with a valuation between $200 million and $5 billion. It’s a free-float cap-weighted index maintained by S&P Dow Jones Indexes, the same company responsible for the S&P 500 and the Dow Jones Industrial Average.
Since the S&P 400 is a cap-weighted index. The stocks with the highest market cap have the most impact on its performance. (“Market cap” is short for market capitalization and refers to the value of a company’s unsold stocks. It’s calculated by multiplying the number of outstanding stocks by the current market price of a single stock.)
How to invest in the S&P 400
There are 2 ways to invest in the S&P 400: stocks and ETFs. If you’re interested in a targeted investment supporting individual companies, consider purchasing stocks. If you’d prefer more comprehensive coverage of the index, look into ETFs, which let you buy stocks in funds that track multiple companies.
To purchase stocks or ETFs, you’ll need a brokerage account. Here’s a look at the investment process:
- Select an investment platform. If you don’t already hold an account, compare trading platforms to find the brokerage that best meets your needs.
- Open and fund your account. Web-based brokerage applications can be completed online. You’ll be asked to fund your account before you can start trading.
- Purchase your securities. Use in-platform or third-party research tools to select the stocks or ETFs you’d like to purchase.
- Monitor your investments. Log in to your brokerage account to track the performance of your investments.
What stocks are in the S&P 400?
Popular stocks in the S&P 400 include:
- American Eagle Outfitters, Inc. (NYSE: AEO)
- Domino’s Pizza, Inc. (NYSE: DPZ)
- Fidelity National Financial Inc. (NYSE: FNF)
- Foot Locker, Inc. (NYSE: FL)
- The Goodyear Tire & Rubber Company (NasdaqGS: GT)
- Grubhub Inc. (NYSE: GRUB)
- Interactive Brokers (NasdaqGS: IBKR)
- Mattel Inc. (NasdaqGS: MAT)
- The New York Times Company (NYSE: NYT)
- SolarEdge Technologies, Inc. (NasdaqGS: SEDG)
- Steel Dynamics Inc. (NasdaqGS: STLD)
- Tripadvisor Inc. (NasdaqGS: TRIP)
- Wyndham Hotels and Resorts Inc. (NYSE: WH)
- Yelp Inc. (NYSE: YELP)
What ETFs track the S&P 400?
Major funds that track the S&P 400 include:
- Invesco S&P MidCap Momentum ETF (NYSEArca: XMMO)
- Invesco S&P MidCap Quality ETF (NYSEArca: XMHQ)
- iShares Core S&P Mid-Cap ETF (NYSEArca: IJH)
- SPDR S&P MidCap 400 ETF (NYSEArca: MDY)
- Vanguard S&P Mid-Cap 400 ETF (NYSEArca: IVOO)
Compare S&P 400 trading platforms
Compare brokerage accounts to find the right fit. Once you open an account, you can begin investing in stocks and ETFs.
Why should I invest in the S&P 400?
Mid-cap stocks represent an investing sweet spot: They occupy the middle ground between newly established startups and blue chip corporations. Companies in the mid-cap range can offer the best of both worlds.
Like small-cap stocks, they have the potential for significant growth. But they’re less volatile and more stable as a result of an already-established business model.
Investing in an index fund that focuses on mid-cap stocks is a unique opportunity that straddles growth and stability. But mid-cap stocks still have risk.
What are the risks of investing in S&P 400?
Some mid-cap stocks have plenty of growth ahead of them, while others have reached the pinnacle of their potential. Investors interested in mid-cap stocks should be wary of where the stock is in its life cycle. A mid-cap stock could be a company on the rise — or it could be a failing former large-cap stock. Before you invest, research the company you’re interested in and learn more about its history and potential.
How is the S&P 400 performing?
The graph below tracks the performance of the SPDR S&P MidCap 400 ETF (MDY) over time. The figures shown are in US dollars.
Investors interested in incorporating the S&P 400 into their portfolio can invest in individual stocks or index-tracking ETFs. But whether or not a mid-cap stock is a practical fit for your portfolio depends on where it is in its life cycle. Review investment accounts across multiple trading platforms to find the broker best suited to your investment goals.
Frequently asked questions
More on investing
Find out about silver ETFs, how they’re traded and where you can buy them in Canada.Read more…
Find out about gold ETFs, what influences their prices, how you can trade them and whether they could be worth your weight in gold.Read more…
Impact investing is perhaps the purest form of responsible investing. Want to know why? Read our guide to find out.Read more…
More guides on Finder
Coronavirus vaccine stocks to watch
Here are the key coronavirus vaccine stocks to watch. Learn more about the companies involved, and find out how to invest.
Going against the crowd can yield great rewards. Just take it from some of the most famous investors in the world.
The IPO ETF stocks to watch in 2021
Not everyone can get in ahead of the hot IPO market, but these ETFs are solid alternatives.
Investing in virtual reality stocks
Pros and cons to consider before you invest in this groundbreaking tech.
Apple vs Tesla stocks
We compare the price performance, dividends and business models behind two of the biggest companies on Wall Street.
Investing in transportation stocks
Transportation stocks can be wise investments. But they can also be very volatile.
How to invest in the BTCX Bitcoin ETF
Another Bitcoin ETF has launched onto the stock market. Here’s how to invest if you’re in Canada.
How the 11 stock sectors impact portfolio diversification.
Investing in vegan stocks
Benefits and risks to consider before you invest in vegan stocks.
Investing in uranium stocks
Consider these benefits and drawbacks before you invest in uranium stocks.
Ask an Expert
You must be logged in to post a comment.