LIVE MARKETS-Midcaps' time to shine?

Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com

MIDCAPS' TIME TO SHINE?

U.S. midcap stocks tend to get overlooked by investors for their small and large cap siblings. However, BofA Global Research says it may be time to reconsider.

The Russell Midcap index .RMCC has slipped about 6% this year, while the S&P 400 .IDX has lost about 8% versus a 10.3% slump in the small cap index .RUT. The S&P 500 .SPX has lost about 6% year to date.

However, at the moment, midcaps are signifcantly under owned, with exchange traded funds tracking the sector holding just $344 billion in total assets versus the over $5 trillion invested in large cap ETFs, say BofA analysts led by investment and ETF strategist Jared Woodard.

That's despite midcap companies accounting for about a third of U.S. EPS growth over the past three decades, BofA says.

That earnings growth should continue, BofA says, predicting midcap earnings will outpace large caps this year. That's as midcap valuations look more attractive, trading around 20% below historical norms.

Versus small caps, midcaps are less exposed to interest rate and tariff risks, BofA says. The mid-cap index could also benefit from policy pushes to boost domestic manufacturing, the analysts say.

Midcap stocks have, on average, gained 12.7% per year since 1984 - slightly above the 11.7% average annual total return on large caps and 10% return on small caps in that time frame, according of BofA.

Among midcap ETFs, BofA has a favorable view on factor neutral and growth funds, and a neutral view on mid cap value ETFs. The brokerage's top picks include Franklin U.S. Mid Cap Multifactor Index ETF FLQM.N and the iShares Morningstar Mid Cap Growth ETF IMCG.N.

Similarly, the Wells Fargo Investment Institute upgraded U.S. mid-cap equities to "favorable" from "neutral" on Wednesday.

(Lisa Mattackal)

FOR THURSDAY'S EARLIER LIVE MARKETS POSTS:

CREDIT MARKETS ARE MORE SANGUINE ON RECESSION RISK, ARE THEY RIGHT? - CLICK HERE

DOUBLE FEDDER: COOLING PPI, TAME JOBLESS CLAIMS - CLICK HERE

U.S. STOCKS LOWER AS LATEST TARIFF THREAT WEIGHS - CLICK HERE

HOW EMS COULD FARE IN THE EVER-CHANGING US TRADE POLICY - S&P GLOBAL RATINGS - CLICK HERE

US STOCK FUTURES A BIT LESS RED AFTER DATA RELEASES - CLICK HERE

DAX COULD BE GOING TO DISAPPOINT MILESTONE LOVERS - CLICK HERE

NOTHING LAST FOREVER, BUT THE GOLD RALLY MIGHT TRY - CLICK HERE

EUROPEAN EQUITY VOLATILITY AT ONE-WEEK LOW - CLICK HERE

BREATHING SPACE - CLICK HERE

MORNING BID: TARIFF WORRIES WEIGH AS CPI CHEER FADES - CLICK HERE