Mid-Cap Stocks: The S&P 400 Against the S&P 500 and 600
Michael Whitman
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Trading since 2017, full-time since 2020
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YouTube creator, 137K subscribers
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Published 2026-11-07
Mid-cap stocks are companies between the large and small caps, and in the US the usual yardstick is the S&P MidCap 400. Under the latest S&P guideline we could find, effective July 1, 2025, a company needs a market value of $8.0 billion to $22.7 billion to be added.
Mid-cap stocks are the companies between the giants and the small fry, and in the US the yardstick most funds follow is the S&P MidCap 400. It has been called the forgotten middle of the market, the size bracket that beat both its neighbors over the long run while getting a fraction of the attention.
We tested that claim on 31 years of fund prices with dividends included. Against large caps it holds over the full record and falls apart over the last 15 years. Against small caps it depends on the start: the S&P 600 fund edged out the mid-cap fund from 2000, while the 400 index led both from 1989. Both halves matter if you are deciding what a mid-cap fund is for.
The S&P 400 next to the 500 and the 600
| measure | S&P 400 (mid) | S&P 500 (large) | S&P 600 (small) | as of |
|---|---|---|---|---|
| size to be added | $8.0B to $22.7B | $22.7B or more | $1.2B to $8.0B | guideline from Jul 1, 2025 |
| total return a year since May 26, 2000 | 9.57% (IJH) | 8.43% (SPY) | 9.84% (IJR) | to Nov 6, 2026 |
| $10,000 on May 26, 2000 became | $112,100 | $85,000 | $119,600 | Nov 6, 2026 |
| worst fall since May 2000 | −55.1% | −55.2% | −58.2% | 2007 to Mar 9, 2009 |
| P/E (iShares method) | 22.04 | 28.88 (IVV) | 19.47 | Nov 5, 2026 |
| holdings (iShares fund) | 409 | 505 (IVV) | 659 | Nov 5, 2026 |
The S&P 400 index itself closed at 3,602.50 on November 6, 2026, 8.3% below its record close of 3,926.98 from August 14, 2026.
How it works: the S&P 400 size band and the funds that track it
The size line is a rule, not a law of nature. S&P Dow Jones Indices sets dollar ranges from the spread of company values across the whole US market. On July 1, 2025 it raised the mid-cap band from $7.4 billion to $20.5 billion up to $8.0 billion to $22.7 billion, and it reviews the bands at the start of each quarter. S&P says the ranges are for additions, not for staying in: a member that grows past $22.7 billion is not removed unless ongoing conditions warrant a change, which is how companies end up moving up to the S&P 500 at a later rebalance.
It is more than a cut of the biggest 900. Like the S&P 500, the 400 is run by an index committee with entry tests beyond size. One is float: the value of shares that trade freely must be at least half of the index’s minimum company size. The Russell 2000, by contrast, is built mainly by ranking company size.
Funds that track it. MDY, the SPDR fund, began on May 4, 1995 and is a unit investment trust with a 0.23% gross expense ratio. IJH, from iShares, began on May 22, 2000 and charges 0.05%. Expense ratios are from each fund’s page on November 7, 2026. Both follow the same 400 companies, weighted by market cap, so the difference between them is cost and structure, not holdings.
A worked example: one dollar figure, two time frames
Take $10,000 put into each fund on May 26, 2000, the first day all three have prices, and reinvest every dividend.
- By November 6, 2026 the mid-cap fund (IJH) was worth $112,100, the S&P 500 fund (SPY) $85,000 and the small-cap fund (IJR) $119,600. That is 11.21, 8.50 and 11.96 times the start.
- First stretch, May 2000 to December 2010. IJH returned 7.92% a year, IJR 8.52% and SPY 0.94%. The 2000-2002 bear market hit the largest companies hardest, and the large-cap fund barely grew in ten and a half years.
- Second stretch, January 2011 to November 6, 2026. SPY returned 13.75% a year, IJH 10.69% and IJR 10.73%. The largest companies did most of the lifting.
- Joined together the first stretch still outweighs the second, which is why the whole-period table favors mid caps. Start the clock in 2011 and the order flips.
The lesson is about start dates, not about mid caps being good or bad. Our index funds page shows the same effect for the S&P 500 alone.
The original data: 258 rolling 10-year windows, MDY against SPY
Rolling 10-year windows, MDY against SPY. One start date can flatter anything, so we used every start. For each month-end from May 1995, when MDY began, to October 2016, we measured the annualized 10-year total return of MDY and of SPY. That gives 258 windows, the last ending in October 2026.
What the 258 windows show:
- Mid caps won 167 of them, 64.7%. The median gap was 1.38 percentage points a year in MDY’s favor.
- Every early window went to mid caps. All 116 that started before January 2005 did. The biggest lead, 7.81 points a year, was the window that began in August 1998.
- Later starts mostly went the other way. Of the 142 windows starting in 2005 or later, mid caps won 51. The last window they won began in March 2009, at the bottom of the financial crisis.
- The latest window, October 2016 to October 2026, gave MDY 10.66% a year and SPY 15.33%.
Calendar years. On the same funds, MDY beat SPY in 14 of the 30 years from 1996 to 2025: six times in 1996-2005, six in 2006-2015 and twice in 2016-2025. With the small-cap fund added from 2001, the S&P 500 fund was the best of the three in 12 of 25 years, mid caps in 7 and small caps in 6. The mid-cap fund finished in the middle 13 times. In 2026 to November 6, IJH returned 10.1%, SPY 8.7% and IJR 15.5%.
The S&P 400 since 1989 and the forgotten-middle story
The index alone. Without dividends, the S&P 400 index rose 10.52% a year from January 3, 1989 to November 6, 2026, against 9.08% for the S&P 500 and 9.30% for the S&P 600. Over that long span the middle came first, which is where the forgotten-middle story comes from. Yahoo’s series start before the 400 launched in June 1991, so the earliest years are S&P’s back-calculated values.
Download the data: MDY vs SPY rolling 10-year returns and S&P 400, 500 and 600 funds by year. Both files are free to reuse under the site license as long as you credit this page.
| Dataset | Covers | Pages citing it | Download |
|---|---|---|---|
| MDY against SPY, rolling 10-year total returns, 1995-2026 | 258 windows, starting each month-end from May 1995 to October 2016 | 1 | MDY vs SPY rolling 10-year returns (CSV) |
| S&P 400, S&P 500 and S&P 600 funds, calendar-year total returns, 1996-2026 | MDY and SPY from 1996, IJH and IJR from 2001, plus 2026 to November 6 | 0 | S&P 400, 500 and 600 funds by year (CSV) |
Inside a mid-cap fund: industrials, no giants and a lower P/E
A different set of industries. On November 5, 2026, industrials were 23.16% of IJH and 8.14% of IVV, the iShares S&P 500 fund, 2.8 times as much. Information technology was 11.33% against 35.52%. Financials (15.94%), real estate (7.55%) and materials (6.05%) also weigh more in the middle tier. A mid-cap fund is partly a bet on those sectors, whether you intend it or not. Our sector funds page covers that kind of exposure.
No giants. MDY’s largest holding on November 5, 2026 was United Therapeutics at 0.72%, and its ten largest added up to 6.63%. In SPY, Apple alone was 7.92% and the top ten were 37.56%. If concentration risk in the big index bothers you, this is the clearest difference.
A lower price on earnings. iShares put IJH’s P/E at 22.04 against 28.88 for IVV and 19.47 for IJR, and price-to-book at 2.71 against 5.55 and 1.95. On those figures the middle tier traded at a 23.7% discount to the large caps. State Street’s page uses a different method and shows 18.53 for the S&P 400 index and 22.76 for the S&P 500, so compare P/Es only within one provider.
When it fails: the 2020 crash, daily swings and departing winners
It did not cushion the 2020 crash. From their early-2020 highs to March 23, 2020, IJH fell 42.2% and IJR 42.6%, against 33.7% for SPY. In 2007-2009 all three lost more than half: 55.1%, 58.2% and 55.2%.
It is bumpier day to day. Since May 26, 2000, annualized volatility was 21.4% for IJH, 22.9% for IJR and 19.1% for SPY. Divide each fund’s yearly return by its volatility and the three land almost level, at 0.45, 0.43 and 0.44.
The cushion of 2000-2002 was a one-off. Measured from May 26, 2000, IJH fell 31.9% to its October 2002 low while SPY fell 47.3%. Nothing guarantees a repeat. When the biggest companies are the ones growing fastest, as after 2011, the middle lags.
Graduates leave. The best mid-cap winners outgrow the index and move to the S&P 500, so a mid-cap fund sells its biggest successes to the large-cap index. That is part of why the bracket can trail when a few large companies drive the market.
Questions people ask
What is considered a mid-cap stock?
For S&P’s indexes, a US company worth $8.0 billion to $22.7 billion when it is added, under the guideline effective July 1, 2025. Other providers draw the line elsewhere, and older articles still quote $2 billion to $10 billion.
Is MDY or IJH better?
They hold the same 400 stocks. The differences are cost (0.23% gross for MDY, 0.05% for IJH on their fund pages in November 2026) and structure: MDY is a unit investment trust, IJH an open-end fund. Our expense ratio page shows what a cost gap does over time.
Have mid caps beaten the S&P 500?
Over the whole fund record, yes: 10.96% a year for MDY against 10.65% for SPY from May 4, 1995. Over most 10-year windows starting after 2004, no. Which answer you get depends on the start date.
How many stocks are in the S&P 400?
400 companies. IJH listed 409 holdings on November 5, 2026; a fund’s holdings list can count more than one share class of a company, plus cash lines.
Related
How index funds work, and what they cost, is on index funds. The size measure itself is on market cap, and the best-known small-cap index is on Russell 2000. The large-cap benchmark is covered on S&P 500, and mixing sizes in one portfolio is part of diversification.
This page is educational, not financial advice. Test every idea on your own charts before risking money.